The Cost of Gender Inequality – 5 tips on how to reduce the gender pay gap

It’s hard to believe that in 2016 gender pay inequality in the workplace still exists.  And yet today marks Equal Pay Day, a day established by the Fawcett Society to highlight the fact that women are still being paid less than men.  How much less? Well, women expect to earn £6,562 or 25% less than their male colleagues on average, according to new research released by totaljobs this week.

We asked over 4,700 employees about their salary expectations, whether they received pay rises and bonuses (and how much), and if they were willing and comfortable to ask their boss for more money.

What we found is highly concerning. It’s not just that women are being paid smaller salaries, but they also earn £931 less than men in bonuses each year, and £397 less in pay rises. And the issue starts at the very beginning of the career ladder  – research conducted last year by totaljobs discovered that female graduates are applying for jobs paying up to £2,000 less than their male peers.

Is this because women aren’t asking for more money? It seems not. According to our research, women are just as likely to ask for pay rises as men (8% vs 9%). However, they are twice as likely as men to feel uncomfortable with asking.

In an effort to reduce and hopefully end salary gaps between men and women, the Government has now stipulated that from April 2018, businesses with over 250 employees will be required to report on gender pay, revealing the discrepancies within their own organisation.

Many of the 145 employers that we talked to as part of our gender pay study said that they weren’t aware of any disparity in gender pay in their business. Four in five employers (78%) are confident that salaries in their organisation are equal across genders.

So employers are confident that salaries are fair, but the research results are saying something different. What’s going on? Well, more often than not, gender pay gaps are completely unintentional, and something that many employers simply don’t realise exist in their business. This is especially true if there aren’t any regular salary checks being undertaken, just like the third of employers (32%) in our research who admitted to not reviewing salaries regularly across gender to safeguard against discrimination.

For many employers then, the upcoming legislation will mean a journey into the unknown which is likely to reveal some uncomfortable truths.

So what can businesses do to help identify and address the gender pay gap?

5 ways to help reduce the gender pay gap in your business

  1. Put in place a gender pay equality policy

Only two thirds (68%) of employers surveyed have a clear gender pay equality policy. For the remaining third, having a policy in place is a good way of setting the ground rules for equal pay, and shows prospective employees, current employees and hiring mangers across the business that this issue is being taken seriously.

  1. Regularly review salaries and pay rises

Only one third (34%) of employers said they review salaries across gender to safeguard against discrimination. Without a process of checks and balances in place it’s easy to fall into the trap of unequal pay without even being aware of it.. Once identified, HR has the evidence it needs to address the issue, whether that be through new policy, education, or pay reviews.

  1. Encourage employees with salary concerns to voice them

Nearly a quarter (23%) of women told us that they think their male colleagues are paid more than them for carrying out the same role. In contrast 58% of men believe men and women receive equal pay, compared to just 44% of women. For those that have concerns about fair salaries, the knowledge that they can raise these concerns with HR or their line managers without any repercussions is key.

  1. Educate hiring managers

Given that many hiring and salary decisions are made by hiring managers rather than HR or recruitment, this is where the problem can start. Over half (51%) of employers told us that they don’t give hiring managers training on gender equality and equal pay. Whether its unconscious bias or just being completely unaware of how much others in similar roles are paid, educating hiring managers about the need for pay equality can help.

  1. Find out if the new equal pay reporting applies to your business

Large employers (250 employees and above) will have to publish their mean and median gender pay gaps from . Ahead of the new legislation coming in, it’s worth checking out how the new rules will apply to your business. Even if your business doesn’t have to report by law, reducing the gap across every business is in everyone’s interest. Naturally, if people are paid equally, they are more likely to be happier and more engaged, and being a fair business is of course much better for your employer brand.

Here’s hoping that in the not-too-distant future, we won’t need to have an Equal Pay Day, because pay gaps simply won’t exist. In the meantime, if you’d like to find out more about gender pay across the UK, read our report here. For advice to employees, read our guest blog by the Guardian columnist Lucy Mangan here.

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