Yahoo Finance The gender pay gap: Are we approaching it wrong?
The headline good news is that the gender pay gap has fallen by approximately a quarter in the last decade.
But despite this being hailed as “great news”, two leading academics have said this doesn’t tell the full story and that still more needs to be done to address the issue.
A closer look at the data shows that in 2023, the gap among full-time employees actually increased to 7.7 per cent, up from 7.6 per cent in 2022, although this is still below the levels before the Covid-19 pandemic.
Writing exclusively for City A.M., Dr Jonathan Lord and Saad Baset of Salford Business School, the pair have dug deep into whether the gender pay gap is being addressed in the correct way and if it can be tackled in a more effective way.
Are we addressing the pay gap all wrong?
Dr Lord and Dr Baset said: “Although the ONS data demonstrates a decline over the past few years post-pandemic, a significant gender pay gap still exists.
“This is despite employment legislation such as the Sex Discrimination Act (in effect since 1975) and the Equality Act 2010, which look to combat discrimination based on sex in the workplace, and ensure men and women receive equal pay for equal work respectively.
“There have also been several campaigns by successive governments, trade unions and campaign groups to highlight and address the gender pay gap. Yet, still it exists. So, are we trying to tackle the problem all wrong?
“It is important to look at the data through a more specific lens, where the gender pay gap can be analysed by job, sector, age, marriage and parenthood, so that gaps can be addressed at a more local and more effective level.”
What does the data say?
According to ONS data, the financial and insurance industry exhibits the highest gender pay gap in the UK, with a “clear correlation” between age and the pay gap. As employees get older, so the pay gap widens.
The data shows a “significant increase” in the pay gap in the age group of 40 to 49, suggesting that women in this group might face challenges in balancing family commitments which could potentially impact career progression, the academics said.
For those under 40 the full-time workers pay gap remained at 4.7 per cent (or lower) in 2023, while those aged 40 and above faced a disparity of 10.3 per cent (or higher).
They added: “This pattern is also noticeable in the professional, scientific and technical sector, as well as in health and social care work. Clearly, there are systemic struggles for older women in the workplace.”
The ONS data also reveals “significant” gender pay gaps within specific occupations and industries. The gender wage gap stands at a “staggering” 29.5 per cent for functional managers and directors, and it is 28.8 per cent for financial managers and directors.
Additionally, the gender pay gap is “significantly high” for certain professionals, including education professionals, web design professionals and barristers and judges.
The academics said: “This gap may be assigned to the prevalence of more males in senior positions compared to females, possibly because older women often have lower levels of education than their younger counterparts due primarily to family commitments.
“Self-employed women earn 43 per cent less than their male counterparts. Is this because women undervalue themselves, and their services, compared to men? Perhaps.”
How can we effectively address the gender pay gap?
Dr Lord and Dr Baset said: “Since the pandemic, flexible working has become more of a priority for many workplaces.’
The new Employment Relations (Flexible Working) Bill will give workers the right to request flexible working from day one of a new job, and this suits women with children and other care responsibilities.
“Working more flexibly will enable female workers to balance family responsibilities with being able to undertake higher paid jobs. Lack of flexibility is seen as a significant barrier in careers in industries that are highly paid and traditionally male-dominated.
“Additionally, HR teams can expand their focus beyond part-time roles, providing a range of flexible work options that accommodate various needs and preferences.
“They can also help by considering modifying a job role and description, rather than asking female workers to adopt traditionally male personality traits, allowing them to progress more naturally in their careers.
“Examining the gender pay gap data allows for the identification of prevailing trends and themes, offering valuable insights into the root causes of the gap.
“By delving into this information, organisations can highlight specific areas that require intervention and implement effective measures to promote pay equality and foster an inclusive work environment in their own organisation.
“Forcing larger companies to report on pay gaps has been a popular measure in trying to close the pay gap, but only a real analysis of why there is pay disparity according to specific demographic, industry and societal differences will engender a true solution to the problem.
“Understanding these dynamics will also highlight the urgent need for policies and cultural shifts that support work-life balance, equitable caregiving responsibilities and ultimately the elimination of gender-based biases in the workforce, which we are all keen to see.”
