04 Apr, 2018
HOW ARE EQUAL PAY AND THE GENDER PAY GAP DEFINED? Equal pay refers to a legal requirement that within an organisation, male and female staff members who are engaged in equal or similar work or work of equal value must receive equal pay and other workplace benefits. The gender pay gap is a broader measure of the difference in the average earnings of men and women—regardless of the nature of their work—across an organisation, a business sector, an entire industry or the economy as a whole. It is expressed as a percentage of men’s earnings and currently sits at 18.1% in the UK, meaning that for every pound earned by a British male, a British female earns just under 82 pence. IF MEN AND WOMEN RECEIVE EQUAL PAY, WILL THE GENDER PAY GAP BE WIPED OUT? Not necessarily. A business is considered compliant with equal pay regulations if, at every level of its hierarchy, male and female workers engaged in comparable job roles receive equal pay and benefits. But if that same organisation’s senior management and leadership teams are predominantly male, while its junior positions are held by a majority of females, it may have a considerable gap between the average earnings of its male and female workers. It’s worth noting that an organisation committed to gender diversity may take positive action that unwittingly increases its gender pay gap, such as recruiting more females at entry level, while maintaining a male-dominated leadership team. The gender pay gap, requires that organisations think more broadly about how they can simultaneously attract, retain, engage and advance more women up through the talent pipeline. DO UNEQUAL PAY AND THE GENDER PAY GAP HAVE DIFFERENT CAUSES? The law concerning equal pay means that employers who do not award equal pay for equal work can easily find themselves facing legal action on the grounds of discrimination by disgruntled workers or teams. The causes of the gender pay gap, meanwhile, are more varied and complex than can be accredited purely to outright prejudice. Some of the reasons commonly cited by various sources for the gender pay gap include: While girls often do well at school, there is a tendency for them to end up concentrated in employment sectors offering narrower scope for financial reward, while higher paying sectors like banking and finance and technology industries are disproportionately male. (Equality & Human Rights Commission). Women are far more likely to take career breaks to look after family and to return to work on part-time wages. Unconscious bias is also said to play a role, whereby employers make assumptions about female ambition and financial goals. (Equality & Human Rights Commission) There for some women there is a ‘confidence’ gap whereby women, it was found by an internal report by Hewlett Packard, put themselves forward for a promotion only if they possess 100% of the requisite skills, while men apply when they meet only 60% of the necessary qualifications. WHAT ARE THE BUSINESS BENEFITS OF PROVIDING EQUAL PAY AND TARGETING THE GENDER PAY GAP? A transparent pay structure that provides all employees with equal pay and benefits reduces the risk of costly, productivity-, morale- and reputation-damaging equal pay claims.