#TimesUpForEmployers: the costs of the gender pay gap

#GenderPayGap #PressForProgress #TimesUp

This week, companies with more than 250 employees were required to disclose their mean and median hourly pay rates and bonuses for men and women, along with the proportion of women in each pay quartile. The results made for depressing reading. Across the UK, a 'gender pay gap' of 9.7% exists, with all sectors showing a pay gap favouring men. Of the largest UK companies, 78% have a pay gap in favour of men. Wow. How is it that in 2018, thirty-five years after the Equal Pay (Amendment) Act was introduced, enshrining in law the obligation for employers to pay equal pay for work of equal value, we still have a gender pay gap?

Well firstly let's be clear that the 'gender pay gap' reporting doesn't measure equal pay for equal work. Rather, it measures - very crudely - what the average and median pay is for men and women. That means, the CEO's salary and his (and let's be honest, in 94 of the FTSE 100 companies, the CEO is a he) secretary's salary are included together to work out the average. So it's less about equal pay and more about equal representation at different levels of seniority. The average UK company has a 52% male workforce, but almost two-thirds - 63% - of the highest paid quartile are men. Simply, there are more men at the top (although undoubtedly there continue to be examples of companies not paying men and women equally, despite the existing legislation - I'm sure Carrie Gracie of the BBC would attest to this).

So what are the reasons for women not being represented equally at senior levels? In a previous article I outlined the key barriers that prevent women being represented equally at all levels of business. The first of these categories is Organisational Barriers. Structural Obstacles interfere with women achieving the most important experiences and skills and building the most critical relationships and exposure necessary for career success. Culture and Work Norms include gender stereotyping and unconscious bias. These barriers are often nuanced and not immediately visible.  A recent study by LeanIn.org and McKinsey found that nearly 50 per cent of men think women are well represented in leadership. And that was in companies where only one in ten senior leaders is a woman!  It would seem it is difficult to appreciate the problem when one has not been disadvantaged by bias.

In addition, Societal Barriers and Family Choices, mean that women disproportionately feel pressure to take on the greater domestic and childcare burden in households, often known as the 'double burden'. Despite the increasing numbers of fathers taking up primary caregiving responsibilities, society somehow has still not shaken off the belief that a woman does that job better.  And finally, Individual Barriers, such as purported differences between men and women in ambition, confidence and self-advocacy do not work in women's favour. Yet when women do try to negotiate or state their ambition for a role, they are often penalised for being "too ambitious" or "too political".

Clearly, something needs to give if we are to eliminate the gender pay gap and get better representation of women at all levels of business. Organisations need to act. Now. The consequences of not addressing the gender pay gap go way beyond individual impacts to women. We now live in a world where we have more scrutiny on gender equality than ever before, and this isn't going to ease up. The increased media attention brought on by recent harassment scandals, the #MeToo and #TimesUp movements, and greater regulatory scrutiny mean that companies can no longer hide. Already we have publicly available reports on the number of women on boards and women in executive roles in UK businesses. And if you haven't already seen it, you can now check your company's gender pay gap at the click of a button. This has huge reputational and brand implications for companies. Poor PR brought about by large pay gaps, failure to report on the pay gaps (a whopping 1,500 companies missed the reporting deadline), and failure to address the underlying issues will make prospective employees wary of these companies. Staff retention and morale can easily suffer when employees feel their employer isn't taking the issue seriously enough. A poor review on Glass Door or an irate tweet or Facebook post is all it takes for an employer's brand to start to be damaged. Similarly, customers, clients, suppliers, investors and shareholders are all becoming wise to the sort of companies that they buy from or invest in, and we can expect further pressure from these groups for organisations to do 'the right thing' by employees.

So my message to the 78% of UK companies that have a pay gap in favour of men, is quite simply: #TimesUp. The time for action is now.

Sharon Peake is the founder and MD of Shape Talent Ltd, a boutique consultancy established with the sole purpose of getting more women into senior leadership roles in business. We work with organisations to remove the barriers to women’s progression and we work with individual women, coaching them to achieve their career potential. Click here to learn more about what we do. You can also join our mailing list and be the first to receive our tools, research and updates.