It’s not enough to tell women to negotiate for themselves and take themselves more seriously: equal pay will only be achieved once wider societal issues are addressed. Anna-Sophie Hartvigsen, Co-Founder of Female Invest, says employers need to step up their efforts to close the gender pay gap.
- In 2022, the gender pay gap in the UK was wider compared to 2021 levels.
- The responsibility of closing the gender gap falls into the hands of CEOs, regulators and generally people who make wider decisions.
- This is a big task but change isn’t impactful without dealing with underlying issues.
The gender pay gap has been written about millions of times, and for companies with over 250 employees, reporting on the gender pay gap became a requirement in 2017. The first report in 2017 saw a median pay gap of 9.1% for full-time employees; in 2022 this stood at 8.3% which, although an improvement on 2017’s figure, is concerningly worse than 2021’s gap of 7.7%.
These percentages look minimal but they add up to billions of pounds out of the pockets of women all over the UK. So what can be done to close the gender pay gap?
Closing the gender pay gap isn’t a problem for women to fix
Ultimately, the responsibility of closing the gender gap falls into the hands of CEOs, regulators and generally people who make wider decisions; despite the efforts of groups like The 30% Club, only 18 of the FTSE 350’s CEOs are women. And when a fifth of men believe the gender pay gap is “fake news”, it becomes a much bigger struggle.
What employees can do is twofold, much like the suffragettes and suffragists who between them gained the vote for women in the UK. The suffragettes made headlines by being vocal about changes they wanted, often through extreme demonstrations although that’s not necessarily the best route nowadays. Meanwhile the suffragists lobbied and gained support from affluent men to help change the fine print and collaborate on new regulations.
To successfully win over both the public and lawmakers (or in this case fellow employees and employers), making women’s voices heard and coming up with concrete, well-planned changes to policies must go hand-in-hand. We’ve spoken to many companies about their female-led ERGs and this is a brilliant place to start.
‘Pay rise’ shouldn’t be a taboo phrase
Men are more likely than women to have asked for a pay rise, and been successful; the ONS’ survey of 16,000 Brits confirmed this. It also helps to have a middle-class job and be under 30 years old, which works against a huge portion of people working in Britain. This suggests that the gender gap often widens in the 30s, which is also when most mothers have their first children.
Often women who ask for a pay rise are deemed selfish – in fact, when researching views on asking for a pay rise, Google’s top “People Also Ask” question was “Why do women not ask for pay rises?”. This feeds into the confidence gap which can be seen in interviews when women aren’t comfortable self-promoting compared to their male counterparts, even if they scored the same on a test.
It’s not enough to tell women to negotiate for themselves and take themselves more seriously – it’s up to the employer to rely on metrics other than self-promotion such as objective goals and reports from co-workers.
A happy female workforce is essential
…As is a happy male workforce.
But when it comes to companies not listening to their female employees, they risk losing not only losing their current women leaders but also the next generation of women leaders. Young women are more ambitious than previous generations and place a higher premium on working in an equitable, supportive, and inclusive workplace; being supported and working for a sustainable & ethical firm sees a higher work output. Younger female employees are watching senior women leave for better opportunities, and they’re prepared to do the same.
The main reasons women are leaving their roles have been noted in a McKinsey survey as:
- They face stronger headwinds when they want to advance (e.g. women leaders are twice as likely as men leaders to be mistaken for someone more junior).
- Women feel overworked and under-recognised. This is especially in softer skills such as supporting more junior colleagues.
- Women leaders are seeking a different culture of work, whether it be a better focus on employee well-being, flexibility, and DEI (diversity, equality and inclusion).
Address root causes of gender pay gap
This is a big task but change isn’t impactful without dealing with underlying issues. Let’s take pensions as an example of the gender gap in personal finance.
With so many women in part-time work (often to care for elderly relatives or children), 23% of women in the UK do not qualify for pension auto-enrolment compared to 12% of men. This state initiative to help people save for their retirement is missing women who have fallen into roles where they’re made to juggle multiple responsibilities and ultimately miss out on their pension payments.
On average, balancing part-time work, lower earnings as well as family and caring responsibilities costs women £136,800 in pension earnings over their lifetimes. This amounts to a 33.5% gender pension gap. Although part of the responsibility is on women to ensure they continue to pay into their pensions when moving to part-time work, more could be done to improve the system in which they often fall through the gaps.
Until these social constructs are addressed, it’s up to companies like Female Invest to educate, empower and enable women to manage their finances successfully.
Female Invest’s book “Girls Just Wanna Have Funds” is on sale now.