How can companies address the gender pay gap?

With the news that the gender pay gap for full-time employees has increased in the UK since 2018, Kate Palmer, Associate Director of Advisory at Peninsula, looks at how companies can address the issue.

Gender Pay Gap

What is the gender pay gap?

The gender pay gap is calculated as the difference between average hourly earnings (excluding overtime) of men and women as a proportion of average hourly earnings (excluding overtime) of men's earnings.

It is important not to confuse the issue of the gender pay gap with equal pay. Equal pay is when employees of one gender are paid less than another for carrying out equal work.

What causes affect a gender pay gap in the workplace?

The gender pay gap is contributed to by a significant number of factors, both internal or external, and will vary from organisation to organisation. Before an employer can take steps to tackle a gender pay gap, they should first work to identify the causes.

The best way of establishing where the issue lies is to carry out an equal pay review. If a review concludes that female staff at a company are being paid less for carrying out the same work as male counterparts, the employer should examine any mitigating circumstances which explain this disparity.

A review can investigate whether there is a gender disparity for certain roles and if this is down to any discriminatory pay practices taking place. For example, it may be that the company is more attractive for male candidates or tends to promote them at a higher rate than their female colleagues. Alternatively, the company’s current family-friendly policies may make it more difficult for female employees to return to work after giving birth.

Following the completion of a review, employers can then implement specific workplace practices designed to address the gender pay gap and work towards targets for reducing it over a certain period.

What steps can companies make to solve a gender pay gap?

One area to focus on is recruitment. When advertising for a role, it is essential that the wording used is not discriminatory or unattractive to applicants of a particular gender. Additionally, implementing the practice of blind recruitment, in which applicants personally identifiable information is removed, is a way to overcome unconscious bias and ensure recruitment decisions are based solely on an individual’s ability and not their gender.

Employers are also being urged to provide more significant support to females moving into or currently working in senior roles. Large companies may use their apprenticeship levy payments towards training courses designed to upskill female employees, providing them with skills that are essential to their career development. Other employers may provide additional training and support to mothers returning from family leave to prevent their career progression from being unfairly stunted because of this leave. 

Employers should not underestimate the impact displaying such a gap can have on company reputation and employee morale. Conducting a review and addressing the gender pay gap can be a good way of retaining staff and attracting more women to the company. If there is no material factor involved following a review, but a gender pay gap still exists, then employers should consider amending employee pay accordingly.

About the author

Kate Palmer is Associate Director of Advisory at global employment law consultancy at Peninsula.

See also

Full-time gender pay gap widens to 8.9%

How to develop a more gender-balanced workplace

Find out more

Gender pay gap in the UK: 2019 (Office for National Statistics)

Image: Getty Images

Publication date: 17 December 2019