With little improvement seen in the UK’s gender pay gap since reporting was introduced, Daisy Hooper outlines some of the factors that could have a positive influence on gender diversity and equity.
Some of the results we have seen reported on the UK’s gender pay gap are deeply disappointing. Five years after the introduction of mandatory gender pay gap reporting for organisations with 250 or more employees, many of the results show that the median gap between what men and women earn has remained stagnant or, in some cases, has worsened.
Recent research from the Chartered Management Institute found that employers are not using gender pay gap data to make a positive difference, with only 17% of UK managers – fewer than one in five – saying their company takes appropriate action to close gaps.
Low-performing employers say they are working hard to address this. However, the evidence shows a significant ‘say-do’ gap: employers think and say they’re doing the right thing, but they are failing to take appropriate action to create more inclusive workplaces for women and other groups.
Closing the gender pay gap
UK workers would share salary to improve pay equity
Closing the gender pay gap may not be easy, but we do know what works in addressing the gap. It’s absolutely crucial that we make a conscious effort to promote women fairly from lower-level positions to higher ones.
We also need to actively sponsor diverse female talent and create an environment that offers flexibility and doesn’t judge those who take advantage of shared parental leave.
Let’s have a closer look at what these look like in practice.
Promote more women
The gender pay gap not only shows that men are earning more than women but also reflects that we continue to see employers with a higher percentage of female staff in junior roles, and less representation at more senior levels.
Our research has shown that women are less likely than their male colleagues to receive promotions, despite making up half of the working population. In fact, CMI’s data shows there are 560,000 missing female managers in the UK right now.
Yet companies with gender diversity in leadership positions are more likely to achieve above-average profitability than those without gender diversity. This means that companies are missing out on the economic benefits a gender-balanced workplace can offer.
Employers must adopt a data-driven approach and use their gender pay gap data to identify where change is required. But it is those in leadership positions who must champion diversity and eliminate unconscious biases in the recruitment and promotion processes and develop action plans with well-defined strategies to improve women’s progression to executive roles.
Sponsoring diverse female talent
Creating effective sponsorship programmes to advocate women’s career progression is highly effective in promoting diversity in executive positions, and above all, demonstrates the company’s values. Yet, this is among the initiatives that organisations are least likely to implement.
According to CMI’s research, while 86% of senior leaders say their companies have formal mentoring programmes, only 21% have established formal sponsorship schemes. Younger women are particularly affected by this discrepancy, with a mere 3% of female managers reporting sponsorship and only 19% receiving mentoring.
For many, the thought of drawing attention to their potential and capabilities can be intimidating in a male-dominated world, which is why sponsors play an integral role in career development. Sponsorship can help women move ahead in their careers by granting them access to networks, visibility, and opportunities to demonstrate their abilities. It is especially valuable to have female sponsors who can relate to their experiences. However, leaders must first recognise the existence of unconscious bias by examining whether they tend to sponsor individuals who are similar to themselves.
Sponsorship can help women move ahead in their careers by granting them access to networks, visibility, and opportunities to demonstrate their abilities.”
Flexible working
Allowing flexible work arrangements for both men and women at every level is key to achieving more gender-balanced leadership. In fact, managers consider flexible working as one of the top five ways to support women’s career advancement.
To make this happen, personalised flexibility is the way to go. We need to recognise and address the unique needs of individual employees at different stages of their lives, so that they can be their best selves both in and outside of work. Creating a culture of allyship is essential to help women feel supported.
It’s also crucial that women who decide to take career breaks don’t get penalised and, most importantly, remain on the employer’s radar for future opportunities.
Pay transparency
Our research also revealed that only one in five managers said that their organisation shares information about how pay decisions are made, and even fewer, just one in 10, said their organisation encourages discussions around pay. This is troubling, as studies have shown that publishing pay bands can help increase the number of applications from women and ethnic minorities.
It’s crucial to encourage open and honest conversations about pay. Employers must take a more thoughtful approach in supporting their female colleagues and work hard to ensure pay is fair and practices are geared towards retaining them and helping them thrive. This involves regularly reviewing and benchmarking salaries to ensure fairness and transparency.
The mandatory gender pay gap reporting forces organisations to examine their internal processes, and they should use these results to scrutinise the data and ask themselves the right questions.
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To truly deliver the productivity and equality boost that the UK economy needs, we need to have less ‘say’ and more ‘do’ on this stubborn issue.
