THE BLOG

The Gender Pay Gap Is Still Alive and Kicking But for How Much Longer?

26/08/2015 12:47 BST | Updated 26/08/2016 10:59 BST

Women work unpaid for nearly two hours every day or 57 days a year, according to our research at the Chartered Management Institute. This deficit reflects the 22% gap between the average pay of men and women managers. Of course, this is unacceptable 45 years after the introduction of the Equal Pay Act in 1970.

The CMI has long campaigned for organisations to tackle the causes of the gender pay gap. Before I expand on this, let's first be clear how this differs from issues surrounding equal pay. The law states that employers must pay men and women who hold identical jobs equal pay. To do so otherwise is gender discrimination and this is illegal. The gender pay gap is slightly different. The pay gap is a bellwether for the number of women rising through the ranks in comparison to men. Put simply, the gender pay gap highlights the fact that women hold 67% of entry-level management roles but comprise just 29% of directors.

In real terms, the pay gap is widest at the top. However, age is also a factor. Women starting out in their careers, those in the 26-35 age bracket, experience a 6% pay gap. The gap increases to 35% for women aged 46-60, equivalent to working 681 hours for free compared to their male colleagues. For women and men in their 60s the pay gap expands to 38%.

Pulling back the curtain, we find the main root cause: prevailing business culture is not inclusive, at least not inclusive enough. Women are disadvantaged by 'traditional' ways of working and they find too many barriers that stop them advancing in their careers.

The CMI has advised organisations on what they can do to close the pay gap with a number of

practical recommendations, such as flexible working arrangements. Progress in putting these

recommendations into effect has been slow, however it looks like this might be soon set to change.

In March, the Government announced that it will pass regulations requiring organisations with 250-plus employees to publicly report on what they pay their men and women. We're still awaiting the finer details of what exactly they have to report on, this is currently subject to a public consultation.

But we can say now that by autumn 2016, the 7,850 businesses employing 11.2m staff will have to divulge what they pay their men and women.

I believe this new era of transparency will be a powerful driver of change. Some big businesses, such as Deloitte and PwC, have already recognised the benefits of reporting what they pay their male and female staff and unilaterally taken action. They understand that to attract the best women into their ranks they have to communicate to women that their salary and career prospects will not be harmed by their gender.

The introduction of new government legislation spells great news for women and businesses alike.

Clearer employee data, improved recruitment and a reinvigorated focus on business culture will help unblock the talent pipeline and support more women to become senior managers and leaders.