Are we doing enough to shrink the Gender Pay Gap?

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The gender pay gap (GPG) has gained significant momentum over recent months and with the introduction of the Equality Act 2010 (Gender Pay Gap Information) Regulations this year which requires organisations of more than 250 employees to publish a GPG report, it is a topic businesses can no longer shy away from. We have seen organisations start to publish their GPG figures and it is clear a problem exists. Notable examples include the BBC reporting a 9.3% GPG and most recently the Bank of England reporting that male employees are paid almost a quarter more than female employees. While many organisations will submit contextual justifications for the figures, many of those justifications themselves highlight the challenges and problems still facing women in the world of employment.

There remains a trend in the UK and across the EU for management and supervisory positions to be held by men which will naturally have a negative impact on figures. This can be attributable to the fact that women still generally spend more time off the labour market than men and often take career breaks to raise a family. Linked to this, is the statistic that women on average spend 22 hours a week doing unpaid tasks such as household work and/or childcare, compared to the average 9 hours spent by men on these tasks. There are also many occupations where women are overrepresented which offer lower wages, (such teaching) than those offered by the occupations predominantly carried out by men, despite requiring the same level of education and experience.

Across the EU, we can see a high average GPG of 16.3%, which varies significantly across member states (i.e in Estonia it is 29.9% and Italy it is 5.5%). Whilst this variation exists, the main causes are similar across the EU.

The European Pillar of Social Rights was proclaimed by the European Parliament, the Council and the European Commission on 17 November. This is a commitment to a set of 20 rights and principles, including principle 2 - the right to gender quality. Under this principle “Equality of treatment and opportunities between women and men must be ensured and fostered in all areas, including regarding participation in the labour market, terms and conditions of employment and career progression” and “Women and men have the right to equal pay for work of equal value.” It is pleasing to see a top-level institution make these commitments and set the right tone for others to follow.

The European Commission has now launched a second round of discussions with trade unions and employers’ organisations at the EU level on how to support access to social protection for all people in employment and in self-employment. This seeks to give people the right protections whatever type of job they are in. These types of social protection systems are vital in achieving a sustainable, adequate and fair environment for individuals to live and work.

Only a few days after the #SocialRights Proclamation, the 2017 Annual Colloquium on Fundamental Rights took place in Brussels focussing on “Women’s Rights in Turbulent Times”. A session of the Colloquium was dedicated to discussing the root causes of the GPG, examining emerging trends on the labour market and finding solutions to tackle the GPG.  Both developments are clearly the result of Jean-Claude Juncker’s commitment in his State of the Union to build a fairer and more social Europe.

In the UK, GPG is at its lowest, of 9.1% and whilst this is itself a positive, it has been slow progress – demonstrated by the fact in 2012 it was 9.5%.  The Fawcett Society suggests it will take 62 years to close the GPG based on the current rate of progress. 10 November marked Equal Pay Day which signifies the point women start working for nothing until the end of the year due to the GPG. On this day the Fawcett Society asked policymakers, employers and individuals to make a #PayGapPledge – where a person makes a pledge to take a certain action to help close the gender pay gap.

In the corporate world we are pleased to see many positive changes, in particular Vodafone set a target of hiring 1000 women within three years who have been out of the workplace for several years, with up to 500 of those women hired into management positions. Research by KPMG stated that bringing these women back into the workplace could generate £151billion a year of economic activity. Initiatives like this are crucial in raising awareness of the GPG and pave the way for other organisations to follow.

There is no doubt that significant progress has been made in both the UK and the EU in recognising equality and diversity and as we have seen recently, both are having the right discussions and taking positive steps. However, further work and effective action is required by both employers and governments to get to the heart of the GPG if we are to see a real and tangible improvement to the figures.

It is no surprise that the GPG is partly the result of an underrepresentation of women in senior roles, demonstrated by the BBC, with 59% of the lowest four grades made up of women, and 59% of the top two grades made up of men. We need to be questioning why this is and tackling the real root causes of the phenomenon.

What is positive about where we are now is that the topic has been brought into the public arena where it can be openly discussed and addressed and where organisations will, and in many cases already, be named and shamed for large GPGs. It also means that women can feel more empowered to raise the topic with both male and female colleagues as well as ask their employers what their GPG is. 

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