How You Might be Misunderstanding the Gender Pay Gap

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Despite making some progress towards gender equality, the gender pay gap remains a persistent issue in the workplace, with complex and nuanced factors at play. Yet why is there still such a glaring disparity between men’s and women’s pay? Why do women continue to face these persistent, systemic challenges in the workforce?

The figures are stark. According to Robert Walter’s 2023 Equity, Diversity and Inclusion report, men are still being paid an average of £12,000 more than their female counterparts in professional roles, while a quarter of female professionals said they hadn’t received a pay increase in the last year, compared to 18% of males.

Meanwhile, the latest data from the Office for National Statistics found that the gender pay gap for full-time employees aged over 40 currently stands at 10.3%, compared to 4.7% for those under 40 years old – suggesting the challenges are particularly acute for women who may be juggling various caring responsibilities, while facing barriers to flexible work.

The statistics also revealed that the gender pay gap has declined slowly over the years – in fact, in 2023, the gap among full-time employees increased very slightly to 7.7%, up from 7.6% in 2022.

“Whilst the gender pay gap narrowed significantly in the 1970s and 80s, over recent decades the rate of decrease has slowed,” comments Jemima Olchawski, CEO of the Fawcett Society. “Data over the last 26 years shows that the mean gender pay gap for full-time workers has decreased by an average of approximately 0.4 percentage points per year. On this basis, assuming a constant rate of decrease, it would take until 2051 to close the gender pay gap.”

According to Bryony Stickells, co-founder of recruitment company jelli, the pay disparity stems from a range of factors. “Unconscious bias and ingrained assumptions about gender roles and capabilities can influence decisions related to hiring, promotion and remuneration,” she says. “Women have historically had disproportionate responsibilities outside of work which has inhibited career progression, resulting in women taking part-time or lower-paying jobs that offer flexibility.”

Expelling the myths

There is a common assumption that the gender pay gap exists, in part, because women have children and therefore work less than men due to childcare responsibilities. While there is an element of truth to this, the gender pay gap starts before women reach this stage in life.

“People believe there is a pay gap because women leave the labour market during a crucial time in their career development, eventually moving to less demanding jobs and part-time work,” says Bryony Stickells. “Though this is true, it doesn’t explain the pay gap during the years women work full time, being paid less than their male counterparts, and research shows that it starts long before children come along. Also, just because women choose to have children, it shouldn’t affect their careers – men also choose to have children, with many now taking parental leave, with negligible impact on their careers.”

Furthermore, as statistics show there is a gender pay gap when comparing the pay men and women receive when working full time, it can’t just be down to the fact many women work part time.

“Raising awareness within organisations will be important to address this,” remarks Kate Palmer, HR advice and consultancy director at Peninsula. “Currently, gender pay gap reports are required by organisations with 250 or more employees. Whilst the government announced its intention to increase the threshold to 500 employees, a company should still review the pay their staff get to ensure that it is fair, regardless of whether they have to report on it or not.”

The nuances of the gender pay gap

The subtle, systemic ways in which women are undervalued in the workplace can also contribute towards the pay gap. For example, many lower income roles are held by women, and most of the higher income roles are held by men. Similarly, within the HR profession itself, men make up a higher proportion of senior HR managers and directors, while women outnumber men in entry-level HR roles.

“The gender pay discrepancy frequently takes on systematic and subtle forms,” remarks Jess Munday, co-founder and head of people and culture at Custom Neon. “Beyond the obvious disparity in pay for the same roles, it can appear in how roles traditionally occupied by women are undervalued, how women’s contributions are perceived, and in the lack of women in senior and higher-paying roles. To properly handle the problem, it’s important to recognise these small details.”

Women also experience unique challenges in the workplace, and employers must be careful not to put women at a disadvantage due to their specific health needs. “As well as maternity, women suffer from menstruation, women’s health issues that cause wider problems, and menopause,” says Bryony Stickells. “Women are often undervalued because of this, as they may need time off work, take more sick days, as well as career breaks. Many women will be overlooked for promotions, lose jobs or step down due to these health issues, therefore stalling their development. Businesses need to implement stronger and more supportive policies to better support their female employees during this time.”

Romain Muhammad, founder and CEO of Diversify, adds: “The systemic undervaluation of women’s work persists, with stereotypes and biases influencing compensation decisions and limited access to leadership roles. Women who return from maternity leave often struggle to regain their career trajectory due to systemic biases and inadequate support structures.”

HR’s role in enacting change

It goes without saying that HR teams have a significant role to play in tackling the gender pay gap within organisations, and they can do so in several ways.

Firstly, HR must promote pay transparency. “HR should advocate for pay transparency, ensuring that employees are aware of compensation structures and salary ranges,” advises Romain Muhammad. “This transparency fosters accountability and helps identify and rectify pay disparities.”

HR professionals should also be reviewing organisational-wide salaries on a regular basis to ensure that any gender-based pay disparities are identified and rectified, adds Grace Pariser, HR & employment law consultant at Neathouse Partners. “The implementation of pay structures and salary bands, as well as advertising salaries on job advertisements, will create a transparent pay culture.”

Ensuring women have access to flexible working is also key. “Flexible work is an important part of the toolkit to close the gap,” says Jemima Olchawski. “Right now, accessing flexible work is a matter of negotiation with your employer. Our report clearly shows that this is a process that favours men and bakes in existing inequality. Women shouldn’t be penalised or disadvantaged because they need to work flexibly, and they certainly shouldn’t be locked out of roles they are qualified and keen to do. Too many women take on less desirable and less well-paid roles so they can access flexibility, and this contributes to the gender pay gap. Flexible work must be made the default for everyone.”

Using HR data to tackle the pay gap

HR teams can also address the pay gap by ensuring they have access to data and analytics within an HR solution, as this can lead to better decision-making on how to tackle the gap, as well as better opportunities and pay outcomes for women.

“Data analytics software, or an integrated HR and payroll system with native reporting, can make it easier to pull the required information together into a single dashboard – not only will this help with annual gender pay gap reporting, but it will allow businesses to continually track data throughout the year,” says Helen Armstrong, CEO and founder of Silver Cloud HR. “This continuous assessment can provide organisations with the ability to proactively identify and tackle any pay gaps and take informed steps to learn not only why this is happening, but what they can do to fix it, which may include training and reviewing promotion policies.”

Bryony Stickells adds: “Data-driven HR solutions empower organisations to address the gender pay gap by providing actionable insights into workforce composition, compensation practices, and potential biases. This enables informed decision-making that promotes pay equity and gender equality.”

The gender pay gap is a complex issue with deep-rooted disparities that impact women in the workplace, concludes Romain Muhammad. “By dispelling misconceptions and addressing systemic biases, HR departments can play a pivotal role in narrowing the gender pay gap. Utilising data and analytics, coupled with DEI initiatives, can lead to more equitable outcomes for women.”