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How to solve the gender pay gap

In the past year, the issue of gender pay equality has hit the headlines across many businesses. On November 3rd in France, women staged a mass protest as they would be effectively 'working for free ‘until the rest of the year due to pay disparity. In December, BBC China Editor, Carrie Gracie, blew open the huge inequalities of salaries across positions at the UK news corporation. Though perhaps one of the clearest indictments of the widespread gender pay gap issue was when female employees at the BBC said that they were 'furious but not surprised' by the evidence that had emerged.

The UK is currently ranked 15th place for gender inequality with a 16.9% pay gap by the World Economic Forum. One of the main reasons given for the gay gap is the issue of different work-life patterns between men and women, namely maternity leave, the raising of children and caring for other family members. It’s important to remember that, purely from an averages and statistics point of view, this is a multi-variant gap form by factors such as people doing different jobs and different lengths of careers. But in the case of the BBC employees, many women were simply being paid a different rate to the male colleagues sitting next to them doing the same job, some even more than half the salary.

Gender equality in many areas of life still has a way to go – PwC estimates the UK could get gender pay parity by 2041 but the World Economic Forum bleakly predicted that it would take 217 years for the gap to close globally.

Many businesses are making steps to address the balance, and we’ve had a look across the globe to see how companies have responded and what initiatives have been put in place so far.

 

1) Iceland's proactive governmental approach

Although unequal pay is technically illegal in the UK, legislation hasn't actually made a fast enough difference. Iceland is #1 for pay equality in the world (followed by other Nordic nations Sweden, Norway and Finland). In January the Icelandic government announced that employers with over 25 employees have to gain a certificate from the government to confirm they are paying equally. This should encourage and ensure that businesses are not discriminating on the basis of gender and if they are, they will face fines. The UK in response has announced that they will require companies with over 250 employees to publish their gender pay gaps from April this year, though it is unclear what will happen with the results.

 2)  More flexible/part-time working

Many women who go on maternity leave find it difficult to return to full-time work and are therefore forced into lower paying sectors that can accommodate these preferences. Those who do want to return full time face the bias against the 'CV gap' compared to their male counterparts. This has often been dubbed a 'motherhood penalty' but shouldn't be considered as such. If businesses take this into account rationally and offer different approaches to working, then highly skilled women should be able to return to jobs that match their skills. For example, JP Morgan offers a re-entry programme to provide former senior executives to have networking and mentorship after a career break. However, there is a long way to go to make flexible working mainstream – only 6% of advertised roles in 2015 with a salary over £20,000 allowed flexible working.

3) Shared parental leave

In order to more equitably distribute the burden that childcare can be on employment opportunities, some businesses have introduced policies offering parental leave for both men and women. Sweden and Norway introduced 'use it or lose it' quotas to encourage male take up of this opportunity.

4) Childcare options

Part of the reason women sometimes find it difficult to return to work is finding affordable childcare options. If businesses offer subsidies then women may be able to return to their old positions faster and therefore not lose out on pay progression/promotions. Some companies have even gone a step further - US clothing retailer Patagonia Inc. provides childcare on-site allowing parents to spend more time with their children and make them feel like family is recognised and a part of Patagonia's work culture.

5) Transparent salaries

If salaries of all employees are published, then everybody can see what salary people should be getting at different levels. Tech company Buffer has been doing this and also including the formulas used to reach them. This has also helped to remove from the table the problem of negotiating pay rises, which research has shown women usually have a disadvantage at.

Whist it has to be recognised that the flat percentage pay gap is built up of a multi-variant equation, there are some steps that businesses can take to ensure that the granular issue of ‘pay for the same job’ can be addressed. Plus, initiatives for businesses to take to actually encourage an equal split of male/ female in the workplace and hit that 2041 gender pay parity target.

Here at Freshminds, we are alert to how unconscious bias and other factors can affect the outcomes for men and women applying for jobs. As a response, we have created a new aptitude test for assessing candidates applying for big schemes with one of the aims to help reduce the diversity divide that can be seen in big scale recruitment. 

Interested to learn more about this?

Contact our Head of Innovation, Patrick, to find out more.