Closing the gender pay gap: time for greater transparency

According to the 2016 Gender Pay Gap report from the World Economic Forum, it will take a staggering 170 years to close the world’s gender pay gap at current rates of progress. This reflects both the lower participation levels of women in the labour market, and the differences in pay in work, and is despite the fact that women at least equal men in educational attainment in 95 countries now.  

Given the slow progress and any reporting of gender demographics and pay today, it would seem that many businesses don’t understand or treat this issue seriously enough, so the upcoming requirement in the UK for businesses with more than 250 employees to report on their gender pay gap is to be welcomed. The obvious waste of skills and talent where we have large gender imbalances across our workforces make clear the business rationale, and indeed the human and social case as well. When a spotlight is shone, leaders pay more attention and progress is made. Since the Lord Davies Review in 2015 focused on gender in the UK’s boardrooms, the proportion of women on FTSE 100 Boards has doubled in 5 years to 26%. Now we need to make progress through all levels and all sizes of organisations.

The UK’s gender pay gap stands at 18% according to the Institute for Fiscal Studies, and is predicted to take 60 years to close.  Given that it’s been illegal to pay men and women differently for the same job since the 1970s, the factors leading to the gender pay gap are in reality rooted in the behaviours and norms in organisations and society at large. More needs to be done from the greater encouragement and careers guidance needed for girls at school, to the cultures and systems in the workplace. We still have much to do in embedding flexible working arrangements and support for women returning to work after career breaks. Women are also less likely than men to work in higher paid areas such as in technology and engineering, and more likely to work in areas like administration. And as noted, women are less likely than men to progress to higher paid management and leadership positions.

Real progress will come in the workplace when organisations more consistently gather the data and insights and start providing the narrative to explain how differences in roles, progression and opportunity are contributing to the gap. So if you work in HR, you’re unlikely to escape questions – from your employees, business leaders and customers - about your organisation’s gender pay gap and what you’re doing to close it. There are many steps individual organisations can take, and we all need to work together as a profession to help make a difference.

At the CIPD, we’ve been reporting our own organisation’s gender pay gap in our annual report since 2015. The new UK legislation requires us to publish a deeper breakdown this year, and we’ll also provide a detailed narrative explaining the factors that have contributed to the gap and what we’re doing to help close it.  We believe this should be the norm for all organisations, whether required or not by local legislation, so that we can all show how we are understanding the gender pay gap and what we are doing to help close it. 

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