What gender pay gap reporting really tells us
Reporting is an opportunity to shine a stronger light on where gender pay disparity is really happening
By the end of today, 9,000 organisations should have reported their mean and median gender pay gaps and broken down the differences across quartiles from the highest to the lowest paid. The majority of organisations left it to the last few weeks to report. The CBI has rather generously attributed this to the difficulties in getting the data together, but concern about what the numbers show and a desire to bury data in the final rush of reporting could also be factors.
Women's earnings have long trailed those of men and progress over the years has been slow. Across OECD countries, the median wages of women working full time are 85% those of men. In the UK, the average pay gap is more than 18% for organisations that have reported, and nine in 10 women work somewhere that their average pay is less.
The biggest reasons are differences in occupations, roles and seniority. Many of the more female-dominated occupations pay less, such as care workers, primary school teachers or cleaners. Whereas occupations that have typically attracted more men, such as technology, engineering or financial services, have the biggest gender pay gaps. There are long-standing cultural perceptions and beliefs for both genders that we need to correct if we're to deliver lasting change. Encouragingly there are growing numbers of employer-led initiatives working on this.
Within organisations the main reason for a gender pay gap is the level and position of women versus men; more women in more junior roles, and more men in more senior roles.
Only a fifth of senior executives across the G7 countries are female. In the UK, following pressure on large organisations to better balance their boards, we are now a little over one in four, but less than 20% of these are executive roles and that is reflected in the pipeline of senior executives. HMRC has reported that men are four times more likely to hold the highest-paying roles.
Career progression is also crucial, but too often women are affected by starting families or other caring responsibilities. An Economist survey showed that around 45% of women with children at home had scaled back their working hours or moved to less demanding jobs. But this highlights very important issues around how we create more flexible working opportunities, alongside the need for policies like better childcare support. Generally, men still take a much smaller role in caring responsibilities and continue with their careers.
The next issue is going to be job equivalence. This is where male-dominated roles that could be seen to be equivalent to female-dominated jobs are paid at different rates. Take male refuse collectors and female cleaners, for example. Having fair job evaluation schemes is critical, and we need to ensure we have these as we address pay fairness. Iceland recently enacted legislation to make it illegal to pay equivalent jobs differently, and others may follow.
Gender pay gap reporting is an opportunity to shine a stronger light on where gender pay differences are really happening, and encourage us all to understand and take actions to improve. More inclusive and diverse organisations not only have access to and utilise the wider base of skills across our workforce, but also bring diversity of thinking, ideas and capabilities that we all need for the future. More than half our graduates are women yet nearly a third of women in the UK say they are overqualified for their job versus a quarter of men.
This can and should be the time when we make more substantial and long-lasting change.
Peter Cheese is chief executive of the CIPD