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Taking Action to Close the Gender Pay Gap

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Despite the fact that there is still a heated debate over workplace equality and compensation, heightened by the BBC's 'gender pay gap' study, government data shows that eight out of 10 organisations with more than 250 employees still pay males more than women. It has been more than fifty years since the Equal Pay Act was implemented, yet gender equity remains an issue in 2022. While the gender pay gap has been gradually closing over the previous fifteen years, the World Economic Forum's 2021 study stated that "another generation of women will have to wait for gender parity." According to the most recent data, the time required to achieve wage equality has climbed from a projected 99.6 years in 2020 to 135.6 years in 2021. Significant action is required to close the gap, and businesses play a critical role in driving this transformation.

So, what exactly causes the gender wage gap, and, more importantly, what steps can businesses take to close it? To examine, we look into a variety of datasets.

What is the gender pay disparity?

The gender pay gap is the disparity between men and women's median hourly salaries across roles. It is a high-level indication of a woman's economic situation in comparison to men.

What are the root causes of the gender wage disparity?

According to official ONS data, the gender pay gap for all employees is presently 15.4 percent, which means that women receive 15.4 percent less than men for performing the same job. Another 27 of the 30 jobs recorded by the ONS were found to pay males more than women for equal-value work.

There are numerous explanations for the gender pay gap, but the Fawcett Society, the UK's leading membership organisation working for gender equality, boils it down to four major areas:

  • Bias and discrimination

  • The labour market division

  • Inequality regarding responsibilities for care

  • Men in higher-level positions

1. Bias and discrimination

Overt and unconscious bias in recruiting, promotion, and compensation choices, including incentives, remain key determinants. Despite the fact that the Equal Pay Act of 1970 made gender pay disparities illegal, discrepancies persist. Males, for example, have disproportionate access to bonuses and are more likely to obtain performance-based compensation.

2. A splintered labour market

Women's work has historically been undervalued, resulting in systems that funnel females into lower-paying industries. Women outnumber males in lower-wage occupations such as health and social care (83%), administration (76%), and retail (76%). (64 percent ).

According to Statista data, the highest-paying male-dominated sectors had the widest gender pay discrepancies. The largest gender pay gaps are seen in the financial, insurance, scientific, and technical industries, which had 30 percent, 21.9 percent, and 19.9 percent, respectively.

3. Unequal responsibility for care

Job options are frequently shaped by the division of childcare responsibilities within the household. To balance child-care duties, women frequently have to work part-time, which limits their opportunities for advancement and wage raises. According to a Government Equalities Office research, "women who have never worked part-time achieve career levels that are substantially similar to men." Gender inequalities in the rates of part-time and full-time work account for more than half of the wage gap, with women disproportionately affected.

4. Men in higher-ranking positions

Women continue to be underrepresented at all levels of the corporate ladder and are less likely to be promoted than males in comparable positions. Only one in every three leadership positions and one-quarter of executive committee positions are held by women. Gender diversity in senior jobs has been shown in studies to help an organisation by enhancing worker retention, performance, and producing a higher financial return for enterprises.

The answer...

We discuss some of the tactics firms can use to close the gender wage gap with some of our experienced consultants.

1. Be open and honest about promotions, compensation, and awards.

"The gender wage disparity is exacerbated by a culture of'secrecy' about remuneration and a lack of standards." When employers are open about their compensation and awards, it virtually removes the issue of unequal pay. "It's critical that HR functions conduct salary audits with a review of promotion criteria to determine the scope for improvement," says Jillian Fleming, HR Manager at Search.

Employee value and appreciation are an advantage of this; "When employees sense they're being paid fairly, they naturally work more." (According to a study published in the Academy of Management Journal)

2. Make flexible working and shared parental leave the norm.

Those with care duties will be able to advance despite a reduction in hours if flexible working is well-designed. Normalizing flexible working and shared parental leave can assist to break down preconceptions and encourage men to take care of their families.

3.Promote a culture that encourages women to bargain for better pay.

According to a variety of studies, males are more likely than women to request salary raises and are more successful in doing so. Discrimination and fear of retaliation are stopping women from gaining better wages, with some women fearing that disputing their income may jeopardise their benefits.

In addition to pay transparency, organisations must foster an internal culture in which women feel empowered to negotiate salary packages. Creating this culture begins with a focus on diversity, with organisations aiming to highlight the female voice in male-dominated industries and lobby for equal advancement chances.

While significant progress has been made in closing the gender pay gap, resolving it is far more difficult, owing to deep-rooted institutional disparities. The tactics outlined above are not fast cures, but with a committed effort, companies may start to promote long-term, significant change.

Lee Turner, founder of Hr NETWORK Magazine, makes the following statement on behalf of the publication:

"As employers, we have a fundamental societal commitment to guarantee that women are treated fairly and equally in all aspects of working life, whether through compensation or promotion, and that this is consistent with the pay and incentive granted to their male counterparts."

"Equal pay measures should not just be the legal thing to do," Lee added, "but in a modern working world with a greater emphasis than ever on inclusion and diversity, companies must regard this as the right thing to do, and by doing so, we can close the gender pay gap for good!"