Gender pay gap, a timely reminder

Those of you familiar with UK – may have seen the increasing reports on gender pay gap in the newspapers. Whats happening? Why are we all talking about it suddenly? The Govt. took a bold step earlier this year. From April next year all UK companies, charities and government departments with more than 250 employees must publish data on hourly wages and bonus payments on a public website.

What is your first response? My first response was that this is good. We will finally bring to forefront what women have been saying for years. It is hard facts and data – and no one can debate it. The engineer in me nodded furiously, tracking metrics are the fastest way to bring change. Just as when you start tracking how many units were manufactured per day, the production tends to increase. Similarly, if we track the gender pay gap, it will slowly start decreasing.

But then...I started to realise that gender pay gaps reposts need to be seen as an enabler rather than the ultimate truth. In one example of professional services firm, the women’s hourly rate in 24% less than men, while the bonus pay is 76% less. This is possibly driven by the fact – the most senior roles are held by men – which implies the highest salaries and bonuses are skewed. The problem to solve remains - how do we retain women through the leadership funnel and create an environment that nurtures women leaders.

When economists talk about ‘equal pay’, they are not talking about equal pay for equal work for men and women, but rather how can be achieve equal pay as a society. This implies having the social setup which does not segregate men and women into ‘choosing’ differentially paid jobs. Women often work in sectors (such as health, education, and public administration) where pay is lower than those dominated by men. When we look at the health sector alone, 80% of those working in this sector are women. More women tend to work part-time in order to balance family and professional responsibilities, and fall behind due to pay gap in hourly earnings of part-time and full-time workers. Across Europe around 32% of women work part-time, compared to only around 8% of men.

To truly achieve gender pay neutrality, we (as organisations and individuals) need to resolve the underlying issues of women’s participation in the workforce and their growth in leadership roles. Gender pay gap is a timely reminder.