Diversity & Inclusion

Gender Pay Gap – Time to Act

Despite years of effort, the UK’s gender pay gap remains stubbornly wide.

Surprisingly, and despite the introduction of legislation, including the requirement for gender pay gap reporting, environmental factors have delivered the most significant changes; as seen below, both the financial crisis in 2008 and the coronavirus pandemic in 2019 produced sharper improvements to pay equality than 20 years of policy.

Figure 1: The gender pay gap has been declining slowly over time, falling by approximately a quarter over the last decade among full-time employees and all employees

Indeed, anecdotal evidence suggests legal and policy interventions do nothing but enact the law of unintended consequences without delivering change. For example, the oft-repeated story of major London firm’s tactic of addressing potential bad news in the run up to 2017’s introduction of Gender Pay Gap Reporting by outsourcing the low-paid cleaning and secretarial roles (that were dominated by women) ensured wonderful pay-gap figures for their organisations, whilst changing absolutely nothing at the national level (as seen by the chart above).  In fact, moving those low paid employees to insecure agency contracts presumably did far more damage to the social fabric than the pay gap did.

The same applies to other interventions, such as Women on Boards. Whilst the intent was to encourage the promotion of more women into senior roles, the outcome was simply that a few women took on a large number of non-executive positions. Alas, this was all too predictable; the Norwegians (who introduced quotas for women on boards in 2003) even have a name for the phenomena – Golden Skirts.

Time to look in the mirror!

That the first instinct of many was to massage bad figures shouldn’t be surprising, but focusing on the blunt instrument of reporting meant that became the objective, rather than delivering change. And not investigating how pay gaps affect our organisations is a missed opportunity. Because the pay gap represents a failure to optimise our organisations and have the right people in the right roles. It’s a numerical value of missing or underused talent.

Failure to recruit women in senior roles or more men in junior roles coupled with bias in the recruitment process and the inability to provide progression for individuals are all big issues.  But fundamentally the pay gap is a parenthood penalty. The parent who loses more year’s workplace experience due to childcare responsibilities will never catch up with someone who doesn’t lose that time. The parent with primary childcare responsibilities is more likely to take part-time, low responsibility job roles. And that parent is overwhelmingly likely to be a woman.

It is only by accepting this unpalatable truth that we can seek to deliver change. There are dozens of unconnected decisions and policies that are contributing to the motherhood penalty in your organisation. Enhanced pay for maternity but not shared parental leave. Lack of job sharing in senior positions. Support for new mothers returning to the workplace that ends about three months after maternity leave is up.

I feel a lot of blame rests on Protected Characteristics. They’ve become the be-all and end-all of diversity and inclusion to the exclusion of all else. We’ve become blinkered to the ‘big nine’ and forgotten about the breadth of the human experience.  Particularly damaging is the Pregnancy and Maternity protection, which absolves employers of the need to do anything at all once the period of maternity leave ends.

And if you don’t believe me, look at your diversity monitoring forms. I’d wager you have no way to report what proportion of your employees have responsibility for young children, or are working part-time purely for that reason, or are reliant on ad-hoc, undocumented permissions from their line manager to manage childcare.

Time for change

As someone who believed pay gap reporting would have a greater impact than it has, I hold my hands up. It will be social and environmental factors that make the most difference to how fast the gender pay gap closes, not more legislation.

That causes me a great deal of concern about ethnicity pay gap reporting, something supposedly high on the impending Labour government’s priorities. Will the next government learn from the non-impact of gender pay gap reporting, or simply seize headline figures as a pointy stick to poke the opposition during that week’s media grid?

For me, there are two key areas that HR teams can work on to create real change in your organisations. The first is training. A good bias and inclusion training programme doesn’t limit itself to the legal minimum requirements but encourages the learner to explore the context of their decision making in the round. By setting out a list of things that one can’t discriminate against, you inadvertently give the learner a somewhat larger list of things which one is allowed to. My belief is that childcare responsibilities definitely fall into that second list where this happens.

The second area is auditing and data. If, as I supposed earlier, you don’t have data on your employee’s parenthood responsibilities, you’re missing a huge part of the employee puzzle. This information affects succession planning, internal job applications, retention and leaving rates.

I’ll finish this piece with several unrelated but definitely interconnected facts. The UK has been unable to improve productivity for years. The UK is increasingly facing skills shortages, and the recent anomaly of buying skills into organisations rather than focusing on training existing employees is coming to an end. Young women are predominantly better educated than men and actually see a pay gap in their favour up until their early thirties. And finally, the average age of women at the birth of their first child is 30.9 years old.

Making the workplace work for mothers of young children is the key to unlocking the gender pay gap. But it’s also the key to unlocking the productivity of UK PLC and filling the skills gaps plaguing our workforces. We simply can’t afford to keep pushing women to the side just because they have young children.