The Gender Pay Gap

Guest blog by Jacqueline Heron

In the beginning

With one of the widest gender pay gaps in Europe, in 2015 David Cameron set out to end this ‘scandal’ within a generation. In 2018, Theresa May said she wanted her government to end the ‘burning injustice’ of the gender pay gap.  As a first step, organisations with over 250 employees  published the gap in hourly pay between men and women on April 4th 2018. This will be an annual exercise.

It’s somewhat of a blunt instrument.  A company might have a gender pay gap if a majority of men are in top jobs, despite paying male and female employees the same amount for similar roles  - and there’s no adjustment for employees’ different roles, so CEOs are compared directly with PAs. Gaps can be skewed by a few high-earners.

However, everybody’s talking about it - from Boardroom to shareholders to customers and employees.  And what’s clear is that most of the UK's medium and large organisations pay women significantly less than men, and that there aren’t enough women in top paying jobs.  No surprises there but it’s useful to have it in black and white. And what we’re seeing so far, is that many organisations are recognising that this isn’t good enough and are publishing the actions they plan to take start closing those gaps. Since this will be an annual exercise, we can monitor their progress.  It’s a case of ‘what gets measured, gets done.’

The results are in

Of the 10,019 firms that submitted gender pay gap data  only 2,255 (22.5%) have a median women's hourly wage that is equal to or higher than that of men. The remaining 7,764 (77.5%) pay women less than men. Across the UK, men earned 18.4% more than women in April 2017, according to the Office for National Statistics (ONS).

It impacts all industries: The construction sector reported the worst average median gender pay gap at 25%. This was followed by finance and insurance at 22% and somewhat surprisingly, education, with a pay gap of 20%.

And the gender pay gap becomes the gender pension gap

Older women are disproportionately affected, with those in their 50s experiencing an 18.6% pay gap, compared to 5.5% for women in their 20s.  This worsens as they reach pension age.  HMRC data has shown the gap between the amount of pension income received by men and women is widening. Women received just 37% of the total amount of income drawn from pensions last year, down from 39% in 2012-2013. Last year, women received £46.5bn in pension income, while men received £79.3bn.

The reasons are complex

Most industries fail to promote enough women. This is a global issue. McKinsey’s found that, whereas half of graduate entrants in American law firms were women, only one in five equity partners was. A study by SKEMA Business School in France found that, although women made up 52% of banking employees globally, only 38% of middle managers and 16% of executive committee members were women.

Men’s and women’s salaries start diverging from the childbearing years. Women pay a significant financial penalty for being parents. They may also play a non-parental care role – unpaid work looking after relatives, partners or friends with illnesses or disabilities. As a result, they are more likely to work in part time roles which are often lower paid with fewer opportunities for progression.

Structural discrimination plays a part. One in nine new mothers is dismissed, made redundant or treated so poorly that she leaves, according to the Equality and Human Rights Commission. Subtler biases favour men in hiring, performance reviews, pay and promotions. A study in 2016 by Warwick University found that, among workers who asked for pay rises, men were 25% more likely than women to be successful.

As does unconscious bias. Take academia, where studies have shown that unconscious bias comes into play when science faculty members receive applications from students with feminine names, judging women to be less competent and less hireable than a man with an identical CV.

 Working towards a solution

Companies should beware of kneejerk reactions and take time to diagnose what lies behind the numbers. They need to look at how they hire, how they pay, how they promote and ask the question: are our practices fair?

The case for diversity demonstrates a positive impact on the bottom line.  McKinsey found that companies in the bottom quartile for gender and ethnic diversity in leadership were 29% less likely to achieve above-average profitability. An analysis of the data shows that in companies where women are fairly or slightly overrepresented in the top pay band, the median gender pay gap shrinks relative to the composition of the company as a whole.

Professor Sucheta Nadkarni, Director of the Cambridge Judge Business School Women’s Leadership Centre says: "Whether it is because women are getting paid less for the work that they are doing or because women are not getting equal opportunities to get into positions where the pay level is high – it doesn’t matter what the reason is, but there is a gender pay gap and in most cases it’s an issue of equality and justice. In both cases it’s an issue of an imbalance of some sort."

We should be using the gender pay gap as a means to an end, focusing not solely on the outcome, but rather the lack of equality in opportunities for women.

It’s Not Fair! Guest Blog by Joella Bruckshaw*

It's not fair that women get paid less, are passed over for promotion, penalised for having children and criticised for being assertive. Our unhappiness with this state of affairs has been growing since well before women got the vote, 2 centuries ago. Now we are much more in touch with the social and economic cost of being a woman in our society. What we are less aware of is the cost to men.

Men suffer too. They are trained to hold back their emotions, to go out and be tough and never to show ambivalence or uncertainty. It isn't that they don't experience emotions it's more that they have less scope for their expression thereby becoming more comfortable with them. As a result, when they are faced with human tragedy, like a divorce or the death of a loved one, they are more at risk of depression, over using drugs, especially alcohol, of being violent or throwing themselves into work as a way of numbing the pain. Or dare, I say it, becoming sexually dangerous!

In the work place, everything to do with emotions is weak and is attributed to women who, by association, must also be weak! Because they have little experience of talking about their emotions, men may not develop the perceptiveness that comes from being familiar with a wider range of emotional response. The lack of emotional intelligence can play badly when faced with the need to influence people around them, to get buy-in and be downright disastrous if they are tasked with leading a senior management team.

This state of affairs makes it difficult to ask for help. Soldiers are trained to withstand all kinds of trauma, physical and mental and if they subsequently suffer from PTSD, it is very hard for them to seek help. If you aren’t supposed to have a problem why would you expose yourself to ridicule, as much from yourself as anyone else? Consequently, they may never know the regenerative benefits of falling apart and rethinking your game plan, a gift that is given to women every month!

Many men don’t realise how important they are to their children because traditionally, leaving the childcare to the woman has been a cultural norm. Consequently, they tend to lose out on the intimate parenting moments women experience that build a life time bond and embed valuable learning about how to be with others. Although this is changing, it will be hard for the younger generation to deliver on this change of heart as they are less likely to have had a good role model in their own father.

Both sexes have challenges brought about by cultural expectations that undermine their sense of themselves and their freedom to contribute. That’s why I focus on the brand rather than the sex of a client. Understanding and taking ownership of who you are and being able to articulate the value it provides, creates a platform for working together and having the conversations that get things done to achieve the best results.  After all, isn’t that why we are in business?

 

* Joella Bruckshaw helps senior leaders make successful transitions drawing on the energy of their personal brand. With a thorough grounding in applied psychology, Joella has worked 1-1 and with groups to generate motivation and behaviour change across all sectors. Her book How to do it by women who’ve done it focuses on how women get to the top. She is a popular speaker and facilitator and since 2003 has worked full time as an executive coach in the corporate sector. www.joellabruckshaw.com