Is The Gender Pay Gap a Myth?

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This has been only the 2nd full week of wages for women in 2023, if you use the TUC as a reference, such is the disparity in pay that sits between the average yearly wage of that of a man compared to a woman. As we celebrate the social, economic, cultural and political achievements of women for this year’s International Women’s Day, we are?still talking about the lack of pay equality.

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The truth behind the stats

The gender pay gap in the EU stands at 13.0% in 2020 and has only changed minimally over the last decade (Eurostat ). This means that women earn 13.0% on average less per hour than men.

The gender overall earnings gap, which measures the combined impact of the average hourly earnings, the monthly average of the number of hours paid (before any adjustment for part-time work) and the employment rate, stood at 36.7% in 2018 (Eurostat ).

The gender employment gap stood at 10.8% in 2021, with 67.7 % of women across the EU being employed compared to 78.5% of men (Eurostat ).

The Equality Act 2010, also known as the Gender Pay Gap Information regulations came into effect in 2017. Organisations with a headcount of 250 or more, must comply with regulations and gender pay gap reporting.?

Why pay gap reporting is important?

Reporting pay gaps is an essential way to provide equality data that can be easily assessed and used to drive change.

BCG’s recent research on gender diversity shows that 91% of companies have a program in place around the pay gap, yet only 27% of women say they have benefited from it. Diverse workforces are regularly found to be more resilient, creative, and profitable. It’s in everyone’s interests to eliminate inequity.

Action to correct inequality can only start when we measure and monitor data. The pay gap reporting legislation has forced large organisations to publish and acknowledge their figures and encourage other employers to do the same voluntarily.

• This isn’t just good news for women, it’s good news for their employers, too. Pay gap reporting brings transparency to businesses.
• Competent leaders will have seen various reports on why this is key. For example, a BCG study found that companies with more diverse management teams have 19% higher revenues due to innovation.?
• Diverse workforces are regularly found to be more resilient, creative, and profitable. It’s in everyone’s interests to eliminate inequity.

Closing the gap, step I & II

Pay gap reporting should be treated as a gauge or indication of embedded diversity issues, which in turn can identify and tackle the pay gap’s root causes.

• Employers are encouraged (but not obliged) to submit an action plan for closing their pay gap, along with their figures. This can put your organisation on the path to reducing the disparity. It may well mean asking tough questions to certain departments or locations?which?have smaller or larger pay gaps than average.
• Addressing the root causes of pay gaps means combining quantitative pay gap data with broader employee insights. Ensure you take an intersectional viewpoint, as this approach is likely to identify where diverse groups could be impacted the greatest.

Closing the gap, steps III & IV

• It is vital that organisations provide agile working options. Women are (still) often viewed as the primary caregiver, potentially impacted by both childcare and elder care responsibilities. Without flexible or agile working approaches in place, they may be forced to remain in lower-paying part-time roles or unable to progress into more senior, higher-paying roles.?
• In addition to this, it's important that firms are considering broader diversity when analysing pay. One of the biggest and most important steps organisations can take is to extend pay gap reporting to ethnicity, disability, and other protected characteristics. Often, the systems for reporting are already in place. The findings enable organisations to make informed business decisions as they work to create an equitable workplace with a diversity of thought.

Monitoring data works! What gets measured, gets done.

A call to action

The business case for closing any pay gap is undeniable. We know that people make different talent decisions now, and their drivers for moving to new organisations are much more centred around organisations with a strong social and moral compass, one that has an inclusive culture and is?transparent in its attempts to demonstrate inclusion.?

There is a strong commercial case to consider too: ethnically and culturally diverse businesses can see up to 36% more profitability (McKinsey, 2020 )

And here’s for something extra….

Three Key Lessons When Leading Through Change > https://www.annapurnarecruitment.com/three-key-lessons-when-leading-through-change/

7 Tips for Successful Recruiting in a Recession > https://www.annapurnarecruitment.com/7-tips-successful-recruiting-recession/

What is the Valley of Uncertainty? > https://www.annapurnarecruitment.com/what-valley-uncertainty/

ERUPT: Excellence in Leadership

We are delighted to announce our 6th conference, which will be live on November 2nd 2023.

ERUPT will focus on how organisations are navigating the uncertainty, challenges, opportunities and growth trajectory over the course of 2023 and beyond.?

Sign up free here: https://www.goerupt.com

About Annapurna

At Annapurna, we are focused on building teams, powering growth.?

We provide the highest quality values-led recruitment service delivered by the best consultants, utilising a search methodology derived from a passion for innovation, thought leadership and outstanding corporate social responsibility.

We are truly passionate about opening up opportunities that will help you grow and sustainably scale using data-driven decision-making.