Yesterday, 8th March, was International Women’s Day which saw social media posts focusing on women’s achievements, tackling gender bias, and challenging stereotypes.
March is also the time of the year when UK companies of 250+ employees are required to submit their gender pay gaps (GPGs) to the government. As we celebrate International Women’s Day this year, we are consistently reminded that progress towards gender equality is not always linear and therefore we want to delve further.
From 2021-2022, the gender pay gap in the UK actually increased from 7.7% to 8.3% among full-time workers. For all workers, that gap is actually 14.9%. In the US, recent research by Pew has shown that progress on the gender pay gap has remained virtually unchanged in the last 20 years, dropping only from 20% to 18% since 2002.
But with workers being more selective than ever, and putting equity at the forefront of their employment decisions, it is critical that businesses close these gaps. And putting that GPG information in the hands of the public is one of the best ways to incentivize organisations to do better.
At an individual level, it’s easy to see the benefit of having publicly available and accessible GPG data. Included’s own data collected from tens of thousands of employees from organisations across the globe has shown that if employees feel pay decisions are fair and transparent they’re more likely to stay at the company. With publicly available GPG data, people are able to check how their own companies are doing and use that to decide if they want to stay at their current jobs, to advocate for themselves or for colleagues, or to negotiate for salary or bonus increases.
At a higher level, this GPG data can also be useful to understand gender dynamics across entire industries. for their gender biases in the past, such as finance, consulting, and tech. This GPG data allows the public, or any entity, to understand the extent to which those complaints are founded, and to identify organisations that are performing particularly well or poorly when it comes to gender equity in remuneration.
The UK government and US states where GPG reporting is currently required provides guidance on how to calculate those pay gaps. However, this guidance – the way these governments ask companies to calculate their pay gaps – is imperfect. As I and others have pointed out in previous articles, much of the pay discrepancy between genders measured using this governmental guidance can be accounted for by seniority level in an organisation and number of hours worked. That means we don’t necessarily know the source of these gaps; is it due to actual differences in pay for different people working the same jobs and hours, or is it due to discrimination in hiring, promotion, or client/account allocation practices?
For this reason, organisations should go beyond just the basic calculations the government is requiring of them. This Diversity 101 approach is compliance heavy and driven by obtaining a legal minimum rather than a maximum. Moving beyond this would help identify the sources of these pay gaps, leading to more effective and sustainable solutions. It would also likely help organisations provide more accurate information to their employees and prospective job applicants.
An organisation that publishes pay gaps beyond just gender, with a comprehensive understanding of the drivers of those gaps, shows its commitment and accountability to D&I more than most others. Showing that commitment is no longer a choice for any company that wants to succeed in today’s world. It’s a matter of survival, and those who seem the fittest and who have adapted the most to the increasing demand for D&I transparency and action will be the ones to thrive.
Furthering gender equality in the workplace
Read more thought leadership on gender equality from Included: