In February, the government published its draft gender pay gap regulations, expected to come into force in October 2016. The gender pay gap is hardly a new phenomenon (the Equal Pay Act was introduced over 45 years ago in 1970), nor has the subject been short of publicity in recent years. So is it too much to hope that the new regulations will have a real impact in practice?
One of the much-talked about ‘causes’ of the gender pay gap is that women are apparently less assertive than men and do not demand higher salaries.
Another is that men hold more of the most senior positions within organisations and the lower-paid posts, such as secretaries, are more likely to be women, with women apparently preferring to focus more on work-life balance and family commitments than men.
There is some truth in both these statements. However, a global ICEDR study challenges these assumptions. In a survey of women around the age of 30, the primary factor influencing their decision to leave a job was pay. Women are actually more likely to resign than men for this reason. What may be surprising is that the reasons men and women leave a job are predominantly the same, and that the reasons women in their 20s leave are the same as for women in their 30s.
The real risk for organisations that do not get their pay strategies right is that women will continue to leave and will join other organisations that appear to value them as much as men. A 2015 study by salary and employment website Glassdoor shows that, in the UK, 80% of young adults aged 18-24 (both men and women) were ‘not likely’ to apply for a job at an organisation where a pay gap existed between men and women for similar work. This figure did drop the older those surveyed became, but as these young adults grow older and form the majority of the workforce, employers need to be aware of and responsive to their expectations, and demands, in this area.
Publishing a poor gender pay gap figure carries significant reputational risk for employers caught by the new gender pay gap regulations. But these studies would suggest that businesses with poor gender pay gap records will also face the (more long-term) risk that they will struggle to recruit and retain the best and most talented candidates.
There are many steps that employers are urged to take to close the gender pay gap, all of which are likely to have some impact on the current situation. These include: explicit policies around equal pay and compensation; more transparency around how compensation is determined such as publishing pay bands; increasing the number of senior women and consider quotas or targets; and promoting flexible working.
The Glassdoor survey asked UK men and women what they thought of the above measures. Introducing legislation requiring equal pay topped the list as the most popular step that those surveyed believed might improve the gender pay gap, over and above any of the above measures.
This is a surprising result, because the UK has already had equal pay legislation for four decades. Women still earn on average 81p for every pound earned by men, and the legislation is therefore not perceived as having achieved its aims in practice.
The answer to closing the pay gap is clearly more complex than introducing any one individual measure. Whether mandatory gender pay audits lead to a wholesale change in practice and a move away from unconscious (and conscious) pay discrimination remains to be seen, however, the glare of publicity can certainly do no harm.
Gwyneth Williams is a senior associate in the employment team at Collyer Bristow