The gender pay gap is getting worse. Despite widespread efforts to address diversity and equality issues women are still being paid less than men.
And not just less, but even less than before, with the gap widening in the last year. According to an article in the Sunday Times, on average women in the UK earned 90p for every £1 earned by men in 2018, in other words 10% less. The year before they earned 9.3% less. A small shift, maybe, but one that is going in the wrong direction.
And some companies are doing an awful lot worse than that. Another Sunday Times article looked at four of the country’s high street banks - including HSBC, Lloyds, RBS and Barclays - all of which have pay gaps that are significantly more pronounced. Barclays came out bottom of the pile, with women earning just 57p for each £1 earned by a man. And although the ratio in their personal finance retail arm stood at 85p to every £1, that figure was down 1p on the year before.
When it comes to high earners, the problem is much more marked. Taking a focus on those earning £150,000 or more, a third Sunday Times article reported that there are five times as many men in this income bracket than women - 295,000 compared to 61,000.
Guidance from the government
So what can employers do? A recently published government report has set out “evidence-based actions” that employers can take to reduce the gender pay gap and improve gender equality in organisations.
Getting more women into organisations, especially at senior levels, is a vital step in closing the gender pay gap. Traditional recruitment methods are often biased - though not necessarily intentionally - which is why the report puts forward a number of tangible suggestions for making the process more fair.
These include putting more than one woman on shortlists for recruitment and promotions, using skills-based assessment tasks to determine a candidate’s suitability, and choosing structured over unstructured interviews. By assessing potential employees based on what they can achieve and ensuring that each one is put through the same set of questions, it is easier to make a fair comparison between them, which reduces the likelihood of bias creeping in.
Setting appropriate salaries
The report also talked about salaries and how it isn’t just a case of paying men and women the same salary for the same job. Instead, transparency is essential in order to ensure that women are able to access salaries that allow them to close the gender pay gap.
For example, women are less likely to negotiate on pay if they are unsure what pay scales are available to them. By being clear about these up front, these women will have a greater chance of negotiating reasonable remuneration. The same transparency should be applied to the “processes, policies and criteria for decision-making” when it comes to promotion, pay and rewards, according to the report.
And in order to ensure that this is all happening, the report recommends that companies have an appointed diversity manager or task force - with responsibility, visibility and the ability to make and challenge decisions.
One of the biggest challenges facing women in the workforce is the need to balance their career with looking after children. Flexible working is a hugely powerful tool in addressing this, with a range of options from job sharing to home working, part-time roles to compressed hours. The report advises companies to advertise all roles as flexible and to encourage both men and women to take up flexible options so it isn’t seen as only a “female benefit”.
Encouraging better uptake of parental leave is another suggestion to help reduce the number of women leaving the workforce at the point of motherhood. Employers should be making it clear to men that they have a legal right to request shared leave, and promote examples of senior leaders taking advantage of it in order to normalise the concept.
And if women do take a career break to raise children, employers should consider options such as returnship programmes to help those returners get back to work when they’re ready. Returnships not only provide mothers with a chance to brush up on their skills, regain confidence and make contacts, they’re also an excellent way of companies making good recruitment decisions.
Whether returning to work after a career break or taking a step up the ladder into a traditionally male dominated space can be intimidating and unsettling. That’s why sponsorship and mentoring schemes can work well. By providing support for women who are progressing or want to progress in their careers, employers can maximise the chance of more senior positions being filled by females and therefore reduce their gender pay gap.
Making a difference
The report is clear that some of these actions are more effective than others, while some need more testing before we can fully appreciate the impact they will have. But the truth is that unless organisations take at least some positive action, the gender pay gap will not only remain but is likely to continue to widen.
This is not just a problem for the women who are losing out on financial rewards. It is a big issue for companies who could not only face potential repercussions due to breaches of equality legislation, but also take a hit to their reputation and brand image. By overlooking flexibility, companies risk losing out not only on the skills, expertise and maturity that mothers can offer, but may well put off younger women entering the workforce who are thinking to the future and the opportunities that might be available to them.
Women are no longer willing to settle for being labelled second rate. As a result, top female talent will be heading towards companies for whom gender equality is not just a tick box exercise. In the future, companies who don’t pay address the pay gap will risk losing out to those who are making significant progress.
That’s why we work hard to champion the power of flexible working as a solution for both forward-thinking organisations and talented, experienced mothers who want to be fulfilled at work without compromising their family life. As we always say, 2to3days isn’t just a business, it’s a movement. Join us today!