Author: Adam Heppell
Date: Wednesday 10th March 2021
The gender pay gap (GPG) is one of the most pressing issues facing women today as we strive for equality in the workplace. Despite promises to remove the gap from the government and businesses, the gap still exists today. So what is the current state of play? What can be done to close the gap?
The gender pay gap isn’t the same as equal pay. Equal pay has been a legal requirement since the Equal Pay Act was introduced in 1970. GPG is calculated by taking all employees in an organisation or nation and comparing the average pay between men and women.
The most recent ONS figures on the GPG show that the existing gender pay gap for full-time employees in April 2020 was 7.4%, down from 9.0% in April 2019. The gender pay gap among all employees was 15.5% in 2020, down from 17.4% in 2019. The gender pay gap remained close to zero for full-time employees aged under 40 years but was over 10% for older age groups. Compared with lower-paid employees, higher earners experienced a much larger difference in hourly pay between men and women.
The research also highlighted a reduction in the gender pay gap within the managers, directors, and senior officials group. The gender pay gap was higher in every English region than in Wales, Scotland and Northern Ireland.
In 2019, it was estimated that it will take 257 years to close the gender pay gap worldwide.
Changes to the Equality Act in 2017 have ensured that companies with more than 250 employees are legally required to report their gender pay gap figures by the end of each financial year from 2018. The requirement was suspended in 2020 due to the coronavirus pandemic. The Equality and Human Rights Commission has said it will not start enforcement action against companies until October, a six-month extension to the reporting deadline - possibly sending the wrong message regarding gender equality.
Representation in the Workplace
An explanation for the GPG is the fact that there is poor representation of women in leadership roles. There has been encouraging progress in recent years but more needs to be done.
The latest edition of the Hampton-Alexander Review, an independent, business-led initiative aimed to increase the representation of women in leadership and board-level roles, has shown more than a third of FTSE 350 board positions are now held by women, with the number of women on boards increasing by 50% over the last five years.
The report shows that while men still dominate in the upper ranks of the UK’s top firms, 220 of the FTSE 350 companies now have at least 33% of their board positions held by women, quadrupling totals from 2015. As recently as 2011, 43% of the FTSE 350 still had all-male boards. There are no longer any all-male boards in the FTSE 350. Indeed, the number of boardrooms consisting of only one woman has also declined from 116 in 2015 to just 16 in 2020.
While the stats on representation are a good start, more could be done.
Increased representation on shortlists could help. Shortlists with only one woman might not increase the chances of selection.
Interview tasks scored equally could help. Structured and unstructured interviews both have strengths and weaknesses, but unstructured interviews could allow unfair bias to creep in and influence decisions.
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