How the Gender Pay Gap could impact your business diversity 

As many businesses navigate how to support staff in the cost of living crisis, and continue to plan for remote working for the long term, other workplace culture and diversity endeavours have fallen off the agenda. One key goal which has lost momentum during recent months, for obvious reasons, is gender equality in the workplace.  

Women around the world are paid 23% less than men on average. In 2020, it was reported that women in the UK make 15.5% less than men on average.  

Businesses looking to promote gender equality in the workplace will have their work cut out in the wake of the global pandemic. But, by implementing considered strategies, and measured, achievable goals for the future of their gender diversity, organisations can work together to close the gender gap and build better balance in the workplace.  

Gender Parity in a pandemic 

According to trends and forecasts leading up to the start of the pandemic in 2020, it was predicted that businesses could close the gender gap within 100 years. However, during the pandemic –we saw a real setback in terms of these predictions. Now, as businesses navigate a whole host of socio-economic challenges, the time it will take to close the gap is estimated at 132 years, according to the 2022 World Economic Forum Global Gender Gap report.   

But what actually is the gender pay gap – and what does it mean for forward-thinking businesses and their HR teams?  

The Gender Gap and why it happens 

 The gender pay gap is different to equal pay. There’s a difference between men and women being paid the same for the same role, and the average difference between men’s salaries against women’s pay.  

Where equal pay is a legal requirement that mandates women to be paid the same as men for the same role, the gender pay gap refers to the average discrepancy between hourly wages for men vs women.  

The gender pay gap has been omnipresent in modern society since women first entered the workplace.  

Childcare is one of the major reasons that gender parity in the workplace is lacking. Women still tend to take on childcare responsibilities more than men, and therefore are more likely to have a gap in their career experience, with fewer opportunities to progress and often take part-time, lower-paid work. In fact, according to a 2019 Living Wage study by KPMG, 24% of female workers are paid less than the real living wage compared with 15% of male workers.  

How it could impact your business 

While the gender pay gap forces businesses to examine their approach to gender bias and diversity and ensure they adhere to equal pay across the board, it is mostly about providing fair and equal opportunities for women to progress at the same rate as men.  

Getting to this point is not only in the interest of your workforce, but benefits your business in terms of productivity, performance, and innovation as well as diversity.  

According to a report by Credit Suisse Research Institute, having more female leaders could increase your share price performance as businesses with more than 20% female managers outperform those with less than 15% female managers.  

Likewise, having more women at the helm could significantly improve productivity and business growth, as Forbes finds those with at least three female board members boast a median productivity of 1.2% above their competitors.   

Closing the gap 

Working to close the gender pay gap within your organisation will be more of a marathon than a sprint. With routines, processes and biases that are often unconscious, but well engrained in the history of the UK workplace, getting to a place of gender equality is easier said than done. 

Here are a few ways businesses can approach their strategy for better gender diversity, and set the wheels in motion for slowly closing the pay gap between men and women in their workforce:  

  • Evaluate the representation of women in high-paid, and senior roles to get a bigger picture.  
  • Analyse your approach to recruitment and staff retention, looking at the ways in which more women could be recruited or promoted to higher salary roles.  
  • Implement more formal interview processes that encourage rational, unbiased comparison and assessment of candidates.  
  • Review where and how you advertise job roles and question whether there are opportunities to advertise in new places to encourage more women applicants.  
  • Provide mentoring coaching for female workers to build confidence and drive career progression.  

In addition to this, one key way that businesses can support better progression for women in the workplace is by offering better paternity leave options for men. Shared paternity leave, for example, enables women to share childcare commitments, and adopting a ‘use it or lose it’ approach to paternity leave could encourage men to take paternity leave, gradually changing the cultural status quo and attitudes towards gender bias.  

Offering more flexible roles, and remote working will also facilitate better chances for gender equality, allowing parents to balance their work around family commitments.  

For more ideas on how to build a more equal, and open approach to financial health in the workplace, check out our recent blog: How to promote financial health in the cost-of-living crisis.