The benefit of reducing the Gender Pay Gap
How doing it can help organisations maximise employee engagement, create a happier work environment and increase profit?
The Gender Pay Gap is a measure of the difference between men’s and women’s average hourly earnings across an organisation or the labour market and it is expressed as a percentage of men’s earnings. It exposes how men and women are positioned from the lowest to the highest paid roles in a company. A pay gap in favour of men is usually explained by more men employed in higher paid jobs, and more women employed in lower paid jobs. E.g. In most airlines the majority of pilots are male, resulting in a large pay gap in favour of men (median pay gap at 9.7%). It is important to note that no company is the same.
Individual organisations will have different causes contributing to their pay gap, but they are most commonly linked to:
- Access and attitude to flexible working and parental leave
- Societal expectations of gender roles
- Progression opportunities
Why reducing the Gender Pay Gap is a good thing?
Although many businesses are worried about reporting their findings, and how this will affect their brand reputation, sharing actions towards a GPG reduction enables an organisations to differentiate themselves and capitalise on being a transparent and fair workplaces. This is also the case for smaller companies who are not legally obliged to report on their gender pay. Some other benefits reducing the gap are:
- It can raise staff morale – this supports recruitment and retention;
- It can decrease the number of uncomfortable pay-related conversations during personal reviews;
- Hiring the best talent will become markedly easier. It will make it clear to new candidates that they’re entering a world of fairer opportunities;
- When it comes to remuneration, HR teams will be spared the unsavoury task of dealing with gender inequality
Show your positive actions! Research shows that taking steps to increase gender representation, diversity and inclusion brings a whole raft of further business advantages with it. A growing body of research finds that the more diverse a company is, the greater its employee engagement, retention, productivity and profit rates are.
A good example of this is the French multinational firm Sodexo. They studied their workforce and presented data from 50,000 managers across 70 entities worldwide. It showed that teams with a male/female ratio of 40% – 60% produce more sustained and predictable results than unbalanced ones.
The Gender Pay Gap ≠ Equal Pay
The Gender Pay Gap is often mistakenly and unknowingly conflated with Equal Pay. This has negative consequence, as it allows people to shrug off the issue. Equal Pay is where men and women are paid the same amount for doing the same work. To do otherwise is illegal. Conflating the Gender Pay Gap with Equal Pay is problematic as it allows people to assume an organisation they run or are employed by does not have a gender issue as long as they pay men and women equally for the same roles.
How can you improve the gender pay gap in your organisation?
Gender balance is not a diversity issue as women constitute 50% of every other dimension of diversity. By continuing to focus on this, we sadly categorise women to what they are not: “a minority among many to be “managed”. Organisations need to move the emphasis away from “helping” or “fixing” women. The gender pay gap is not a women’s but a business’ matter. To make progress, we need to frame the issue in a way that it fosters a culture of change.
Success in this area comes when combining powerful business process:
- Training needs to be combined with assigned responsibilities for compliance
- People need to be aware, but also experience change
- Mentoring needs to come with real sponsorship (opening doors, making people shine also in their absence!);
- No awareness workshops, without increased and measurable access to opportunities
How can Cadence Innova help you?
During a recent training session Cadence ran for Women in Social Finance network, we invited Hackney’s Employment, skills and human resources Councillor Carole Williams. She discussed how the gender pay gap helped Hackney adopt an inclusive approach to equality – looking beyond gender. They have a wide range of equality initiatives, including a parental leave policy and many employment programmes they run as a council.
Every change is dependent to the subtleties of your business context. There is no one size fits all approach. As Cadence understands local government and political issues, the systems and the complexity of communities we can provide technical and leadership support at the intersection of these worlds.
Do not hesitate to contact us if you have any question and you want to know how working to reduce the GPG can generate gender smart investments, impactful business processes and a happy & productive workforce!
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