Gender Pay GapLeaders Plus FellowshipOpinion

3 Things Employers Can do to Close the Gender Pay Gap

3 Things Employers Can Do to Close the Gender Pay Gap

Friday, November 20th is #EqualPayDay in the UK, the day in the year when women effectively, on average, stop earning relative to men. CEO and Founder of Leaders Plus Verena Hefti shares 3 things employers can do to close the gender pay gap and ensure a fair working environment for all women. 

Friday 20 November 2020 is #EqualPayDay, which effectively means, from this date onwards, women are working for free.

You might be familiar already with the term ‘gender pay gap‘, put simply this is the percentage difference between average hourly earnings for men and women.

Reasons cited for the gap include more women in lower-paid, part-time work that fits around caring responsibilities, the fact that statistically, new mums are less likely to get promoted after having children than dads, combined with higher salary levels in occupations which are chosen disproportionately by men.

According to research by King’s College, almost 9 in 10 FTSE 350 companies report that one of the biggest contributors to their pay gap is that women don’t progress in their careers. We know that too many women get stuck on the career ladder after having children. This is also known as the ‘motherhood penalty’.

And behind these shocking statistics are a host of distressing human stories.

Cherished career ambitions that have gone unfulfilled despite their huge potential.

Parents torn between giving up work and giving up their careers because flexible working isn’t a viable option in their job.

Frustration with employers that talk a lot about equality, but do little in practice to make it a reality even though it’s costing them millions in wasted expertise and lost talent.

This is further backed up by the fact that only half of those FTSE 350 companies mentioned above include the leadership pipeline or revised maternity policies in their pay gap action plan to try and tackle the issue.

The fact is, far too many talented mothers get stuck in middle management because they happen to be parents, feeding into the pay gap. Or worse, are forced to leave the workforce entirely because it’s impossible to make work, well, work.

So, what can employers do to tackle this?

Here are three things I suggest employers should do to help close the gender pay gap:

Number 1: Analyse the Data on Part-Time Workers and on Career Progression of New Mums

Almost a quarter of the gender pay gap is driven by part-time workers being paid less per hour than full-time workers.

Often those part-time workers are women who have caring responsibilities and this, in turn, feeds into the gender pay gap.

It is crucial that employers devote time and resources to their gender pay gap action plan, a good start would be to measure whether there is a gap between part-time workers and full-time workers per hour at the company. Then, looking at the steps that could be taken to close that gap.

Equally, most large employers track post-maternity leave retention rates diligently. But, the important question is: how many of those returning from maternity leave continue to progress up to the ladder to better-paid jobs? A simple step forward is to track the career and pay progression of individuals in the 2 years post-maternity leave.

Number 2: Focus on Career Progression

We know that a key driver of the pay gap is that there are not enough women in senior roles.

Simplified, this means that if you have many well-paid men at the executive level and many junior female administrators, you are going to end up with a huge pay gap.

So, employers must identify the groups that are likely not to progress up the ladder and why.

I’d argue that new mums are a key group who are statistically less likely to progress, meaning they deserve some extra support to make their career dreams a reality.

That’s why I always say to people that our award-winning Fellowship Programme isn’t a leadership development programme, in fact, we assume that most of our Fellows already have fantastic leadership skills. Instead, it is a programme that supports you with career progression, including managing workplace politics, developing your vision for your career and family life, and developing a strategic supportive network.

Finally, Number 3: Be Brave and Challenge Existing Assumptions

One such common assumption is that women do not ask for pay rises. However, research found this not to be true – women are equally as likely to ask for pay rises but (crucially) are far more likely to be rejected.

So, when other senior leaders in your organisation make sweeping statements ‘blaming’ women, challenge them and instead propose that systems and processes are reengineered to support gender equality, e.g. pay rises that are not linked to individuals making decisions. For further reading, I’d recommend Iris Bohnet’s brilliant book Gender Equality By Design.

It’s no doubt that the gender pay gap issue is complex, but it is clear that ensuring new mums in your business get promoted in the years after maternity leave is critical to closing it. By intentionally measuring and addressing the progression of new parents and committing to making positive change, together we can change shift the dial.

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