Today marks a day of action. Equal Pay Day opens up conversations about the complicated intersectional barriers that have created unequal pay. Here’s why it matters and what we can look for in gender pay policy in the future.
The gender pay gap is the difference in earnings between men and women. Companies with over 250 employees are required by law to publish not only what this difference is, but how large it is in relation to several variables including the age of their employees, seniority level and whether employees are full- or part- time. Consistently, data released by the Office for National Statistics (ONS) prove this gap is significant. Their most recent figures show the UK has an average gender pay gap (GPG) for all workers of 17.3%, rising to 20% for black women. This means that women on average receive 82.7p for every pound earned by a male colleague. It means that from today, women effectively start working for free until the New Year. This tells a powerful story about the way we view and value women in the workplace.
The ONS collects a whole heap of data detailing pay variations. Each variation tells us something different about where the pay gap comes from. 2019’s figures point to the seniority of the roles women gain. For the position of senior managers, professionals and senior officials, the gender pay gap grew from 13.9% in 2018 to 15.9%. Simultaneously, the gap reduced for administrative roles, from 12.3% in 2018 to just 4.9% today. This might reflect a need to change the way we’re tackling the pay gap. Hiring women without careful consideration of seniority is counterproductive. If most female staffers occupy junior positions, a company’s pay gap score will remain high because most of their wages will still go to a high-paid, predominantly male senior workforce. Companies need to focus on the seniority of the women they’re employing, rather the simple fact they’re hiring women.
Improving the GPG doesn’t just benefit women: it benefits business and in turn, all workers. Research shows that a gender balanced and diverse workforce generates higher profits and solves more problems. A Boston Consulting Group study found that workplaces with above average diversity scores generated 73% more revenue from innovation than those with below average diversity scores and a Business Harvard Review paper has also recently revealed that a firm increases profitability by 15% when they put women in a position of corporate leadership. A gender equal workforce creates a more innovative, profitable and dynamic workforce that reflects the wider world within which it operates. It quite literally pays to be gender equal.
Despite this, the gender pay gap appears across almost every industry. Ryanair was one of the worst performing big companies of 2019, with a pay gap of 71.8%, meaning women are paid just 28p for every £1 earned by a man. Ryanair’s male pilots also outnumber their female pilots 45 to 1. Banking is also notorious for underpaying female staff. HSBC hold a pay gap of 59%, followed by Barclays (43.5%), Lloyds Bank (42.7%) and the Royal Bank of Scotland (36.5%). But it isn’t just banks and airlines that fall below the national pay gap average. Some unexpected sectors also reported high gender pay gaps, including many education institutions. St Paul’s Catholic School reported a gap of 35.9% up from 29.5% in 2018, Durham University has a gap of 29.3% and Wigston Academy Trust’s pay gap is a whopping 69%. Now that we know this gap exists, and exists consistently throughout a wide variety of workplaces, we need to work on tackling it.
Equal pay may feel like a huge, overwhelming problem, but it is tackleable. There are 8 ways any company can shrink their pay gap: (1) monitor how many women achieve promotions in relation to male staffers, (2) examine your promotion process to identify where women are falling behind (3) look at the gender balance of your industry as a whole (4) find out when women are leaving and why (5) look at where pay fluctuates, is it through bonuses or pay grades? (6) consider how men and women score on performance and consider why this may vary (7) ensure part-time workers are well supported (8) cater to caring responsibilities and flexible working.
The challenges businesses face in shrinking their gender pay gap tells only one side of this complex story. The women who earn less and are often expected to undertake more unpaid labour (women typically undertake 75% of unpaid childcare responsibilities) tells another. To support those women, and particularly those earning £30,000 or lower, the Fawcett Society have announced the launch of their new financial advice service. Backed by former BBC China Editor Carrie Gracie, who donated her backdated pay, the service will offer legal advice to women who believe they are experiencing pay discrimination and do not have access to legal advice. The legal hotline aims to resolve pay discrimination issues directly with employers. The gender pay gap isn’t going to go away overnight, but the more businesses and employees work together to tackle the complicated web of problems that has produced this gap, the sooner it will shrink.
The Whitehouse team are experts in gender politics, providing political consultancy and public affairs advice. More information about our gender and political policy experience can be found here, or, if you have any questions, please contact our Chair, Chris Whitehouse, at email@example.com.