How to reduce the gender pay gap in your business

Author
Jackie Longworth
Chair - Fair Play South West, The Women's Equality Network
9th March 2017

As businesses gear up to calculate and publish their gender pay gaps in compliance with the new regulations it is timely to reflect on what causes such gaps and what actions a business can take to help eliminate them.

Some will identify cases where they are not fully compliant with equal pay legislation for which the solution is obvious, though potentially costly to implement.

However, it is often found that a significant cause is segregation of women and men, with women tending to be in lower paid occupations and/or at the lower end of the pay hierarchy within occupations. Businesses will need to check their recruitment and promotion processes and remove any unconscious bias and discriminatory practices, using the wealth of advice from EHRC, CIPD, ACAS and others.

The reasons for job segregation go well beyond discrimination in processes, however. Analysis of ONS data shows that women’s hourly pay starts to diverge markedly from men’s as they reach their thirties and the gap increases as they get older. Detailed analysis of the data suggests that much of this is due to women moving to lower paid occupations as they start to take up unpaid family care responsibilities, but it also occurs within occupations, particularly higher paid ones. The questions for a business, then, are: why do some women leave their decent jobs when they have children whereas men don’t; and why do some women who stay in the same occupation start to lose out on hourly pay at this time?

Women tell us that the answer to the first question is the lack of opportunities to work flexibly in decent jobs, and the answer to the second is that people who are allowed to work flexibly are paid less than people who work the normal full time hours. However, the law is intended to stop these things happening.

Under the Part-time Workers Regulations, part-time workers are protected from being treated less favourably than equivalent full-time workers just because they’re part time.

A part-time worker is someone who works fewer hours than a full-time worker. There is no specific number of hours that makes someone full or part-time, but a full-time worker will usually work 35 hours or more a week. Part-time workers should get the same treatment for: pay rates (including sick pay, maternity, paternity and adoption leave and pay); pension opportunities and benefits; holidays; training and career development; selection for promotion and transfer, or for redundancy; opportunities for career breaks.

There is clear evidence from the data that these regulations are not being complied with in many businesses. The pay gap reporting regulations do not require separate reporting of the difference between the pay of part time and full time workers. However, the analysis will expose any non-compliance to the employer and since the majority of part-time workers are women it will not be possible to reduce the overall gap without making sure that any non-compliance is eliminated first.

The more recent Flexible Working Regulations give all employees the legal right to request flexible working - not just parents and carers. Flexible working is a way of working that suits an employee’s needs, e.g. having flexible start and finish times, part-time working, job sharing or working from home. If an employer doesn’t handle a request in a reasonable manner, the employee can take them to an employment tribunal. An employer can refuse an application if they have a good business reason for doing so and there is evidence that a large number of flexible working requests are in fact refused. Furthermore, the right only applies to someone already in the post; the Women and Equalities

Select Committee found that only 8.7% of jobs paying a full-time equivalent of £20,000 are advertised as available to work flexibly or part-time. This creates a significant bottleneck to women’s employment, promotion and progression opportunities. A business serious about reducing their gender pay gap would adopt the good practice of making all jobs, at all levels, available for flexible working, where necessary by reviewing and adjusting how work is organised.

These actions by businesses are not of themselves enough to eliminate the pay gap.

The British Chambers of Commerce, amongst others, has identified the cost and poor availability of high quality childcare as a cause of the loss of skilled women from employment which is damaging both productivity and the economy. They argue that childcare should be funded as infrastructure and be universally available. Women also tell us that the lack of affordable, conveniently located, high quality childcare means many are forced to work fewer hours than they would like in jobs which underutilise their skills and experience.

The Women’s Budget Group estimate that state provision of free universal childcare for all children from 6 months to school age would nearly pay for itself by increasing women’s employment, thus increasing tax receipts and reducing benefit payments; and that is before taking into account the wider economic and social benefits of indirect additional employment and improved life-chances for disadvantaged children.

Gender pay gap reporting offers businesses the incentive to join the campaign for free universal childcare.

In the meantime, there may be more that employers could do to secure high quality affordable childcare for their employees, by working together with other local employers and local authorities. Ideas which have been suggested and might be worth investigating further include establishing a local fund with input from local employers for subsidising provision locally. By increasing the availability of flexible working in decent jobs and supporting affordable childcare businesses will not only reduce their gender pay gaps and enhance their reputation they will also help the economy and inclusive growth.

About the author

Dr Jackie Longworth is a feminist activist and Chair of the women’s equality network Fair Play South West. She received an Honorary Doctorate from University of West of England in 2015 in recognition of her contribution to gender equality both locally and nationally. She is a recognised expert on the gender pay gap, its causes and what is needed to eliminate it.

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