Kathryn Nawrockyi, Opportunity Now director at Business in the Community
Today is Equal Pay Day – but the pay, of course, isn’t equal. Due to the gender pay gap, women across the UK are now working for free until the end of the year. Whilst on one level it seems unbelievable that in 2014 women are still earning less than men, it’s also beginning to sound like a stuck record. It seems obvious that men and women should receive equal reward and recognition for the work regardless of gender – so why is progress on closing the pay gap so frustratingly slow?
Last year the Office for National Statistics’ Annual Survey of Hours and Earnings found that the pay gap had actually widened to 10 per cent – the first time the gap had grown since 1997. For women in part-time work, the situation is even worse; full-time workers earn an average of £13.03 an hour, whereas for part-time workers it’s just £8.29.
This is an issue that needs to be tackled, and that it can only be done through employers taking decisive action.
“ This is an issue that needs to be tackled, and that it can only be done through employers taking decisive action. ”
Women are also more likely to be affected by in-work poverty. This has become a relentless trend in recent months, largely due to slow pay growth, with many workers taking second jobs just to make ends meet. Research from the Fawcett Society shows that 62% of workers earning below the Living Wage are women and 25% of all working women earn less than the Living Wage. Meanwhile, last month the think-tank Resolution Foundation reported that five million workers in the UK were in low-paid jobs, with almost a quarter of those stuck on minimum wage for the last five years. Many of those lowest-paid workers are likely to be women working in the ‘five Cs’ (caring, clerical, cashiering, cleaning and catering), which are ranked amongst the lowest-paid sectors, and young women make up 61% of apprentices in these sectors. If we do not address this issue, we risk leaving a generation of women trapped in a cycle of low pay and wasted talent.
So what can businesses do to tackle the pay gap? For a start, they could carry out equal pay audits for all staff and publish the results - something that we know works effectively from our 2013 Diversity Benchmarking Trends Analysis. Our Transparency, Monitoring & Action Award winner Friends Life offers a great example of how to do this effectively and the impact it can have on an organisation. Labour and the Liberal Democrats have both announced plans to include pledges to enact Section 78 of the Equality Act 2010 – which mandates the annual publication of anonymised details of men and women’s pay at any organisation with over 250 employees – in their election manifestos, and it will be interesting to see the potential impact that this has on incentivising businesses to look at their own pay structure and narrow any gaps.
But we must also address the issues of male and female employees’ differing perceptions of pay. Opportunity Now recently published Sector Insights from our Project 28-40 data, which further examined the experiences of women in four sectors. One of the most shocking statistics was the perceived gap in pay; for example, in the finance sector, just 34% of women believed men and women at the same level in their organisation earned the same, compared to 43% of women overall and three-quarters of male respondents. This suggests a need for senior leaders – who themselves are more likely to be men – to engage with all staff in order to tackle these perceptions and build trust that women will be fairly rewarded for their efforts.
The next Annual Survey of Hours and Earnings is due to come out in two weeks. The pay gap may have shrunk, it may have widened, or it may have stayed the same – we don’t know yet. But what we do know is that this is an issue that needs to be tackled, and that it can only be done through employers taking decisive action.