25th April 2016
Concern has been growing over continuing inequality between male and female pay in the UK. Research has shown that, on average, a woman earns only about 81p for every pound earned by a man. Here HR and payroll systems provider FMP looks at the reasons for this disparity and what HR staff can do about it.
Mind the Gender Gap
Large firms will have to disclose their “gender pay gap” from 2018, calculating the difference in pay between their male and female employees, and publishing the figures on their website annually. They will need to start working out the pay gap from April next year to prepare for publication.
There will also be a league table, ranking businesses on how large the gap is. Around 8,000 companies with over 250 people on the payroll will be affected, and will be required to declare the whole picture, including bonuses as well as salaries. Women and Equalities Minister Nicky Morgan announced earlier this year that companies will also have to reveal how many male and female employees fall into each pay sector.
The pay disparity adds up to an average £300,000 over a working lifetime, something which was highlighted by women’s equality charity The Fawcett Society this year on International Women’s Day. This earnings gap also affects retirement income because it means that payments into pension funds are lower.
Gender disparity in pay is not just a problem in the UK, but is also something that is being addressed in other parts of the world. President Obama has taken action over it in the US, announcing new regulations which will affect firms with a workforce of more than 100. They will have to supply data showing pay gaps based on gender and ethnicity.
Reasons for Pay Disparity
Gender disparity in pay is a complex issue caused by various factors including:
Staff Doing Different Jobs: Some areas of employment still tend to have more male and some more female staff, with the departments where more women work sometimes being seen as having lower status. This “horizontal segregation” means that, for instance, more women tend to work in caring roles and as shop assistants, jobs which are often lower paid than some male-dominated jobs, such as being a mechanic or working in construction.
Discrimination in Recruitment and Promotion: Historically, more men have risen to top positions in management. Many women feel that male bosses can tend to recruit and promote people similar to themselves, meaning men have an advantage. One recent study suggested that this kind of discrimination is often unconscious, but many women cite it as a major factor holding them back.
Work-life Balance: Women are almost twice as likely to work part-time as men, according to recent research. Often the reason for women preferring flexible working arrangements is that they also have other responsibilities, such as childcare or looking after elderly or disabled relatives. Working part time can make women less likely to be promoted, but it needs to be recognised that their life experience and skills gained in the outside world can be valuable for business.
What Can Be Done to Lessen the Gap?
The Government and campaigners are hoping that the change in the law requiring reporting of gender gaps will lead to action to lessen the disparity. It is hoped that, when companies have to draw up the statistics, they will discover the reasons for differing pay rates within their organisations. They should then be able to come up with plans of action to change the culture which is holding women back.
The continuing development of digital technology is also being hailed as something which can help women to progress in their careers. There is evidence that women often find digital technology can make it easier to balance life and work, and that using technology is also helping to open up a greater range of job opportunities to female applicants.
HR teams can help to tackle the problem by drawing up strategies and action plans for promoting equality within an organisation, and by using HR recruitment software which makes it easier to monitor this. FMP Teamspirit HR and payroll systems’ recruitment module includes Equal Opportunity reporting, making sure your applications process complies with best practice. The software also allows you to carry out full analysis of applications and match applicants’ skills with those needed for the job.
HR and Payroll Systems – Click to learn more about how FMP Teamspirit’s recruitment software can help your organisation.