3 April 2018

  |  CBI Press Team

Update

Gender pay revelations give us the catalyst for change

CBI Director-General writes in the Daily Telegraph about the gender pay gap reporting deadline for businesses.  

Gender pay revelations give us the catalyst for change

Tomorrow is the deadline for companies to report their gender pay gap. Firms who have not yet published their data need to get their skates on. They’ve had fair warning. Excuses will not do.

And it’s right to take gender pay reporting seriously. The results so far make for eye-watering reading. The majority of firms – as many as three in four – pay men on average more than they pay women. And in some firms, the gap is 40pc, 50pc or higher. The data show how far we have to go to create equal opportunities for men and women in the workplace.

Now, one thing must be made clear. The gender pay gap is not in general about women being paid less for the same job. That’s not to say this doesn’t happen – it does, is illegal and must be stamped out.

No, the bigger issue is that men and women do different jobs. In airlines most pilots are men and most cabin crew are women. In law firms, more partners tend to be men, in banking more managing directors. And so it goes on.

The causes of these differences are complex, but gender pay reporting means that firms – and their staff – will know exactly where they stand. Transparency is a potent tool for change. What gets measured gets done, and the litmus test of success will be what firms do to improve their scores and create more diverse and inclusive workplaces.

And firms know that change is needed. Access to talent and skills is the most commonly cited challenge that businesses tell the CBI they face. They want to create more opportunities for women to thrive, and gender pay reporting provides a benchmark for what is and isn’t working.

It also spurs healthy competition – the chair of one retailer said to me they would be looking carefully at the gaps reported by their competitors, and next year try to beat them. The CBI’s own gender pay gap is 9.7pc – we aim to close it through recruiting more widely and improving policies around progression.

Our members are doing similar things. When we asked them how they were responding to gender pay reporting, nearly two in three said they were taking more steps on diversity and inclusion. Many are adapting their daily decision-making processes, questioning previously accepted practices – “challenging the everyday”. From individual mentoring schemes and making flexible working the norm, to recruitment programmes aimed at women returning from a career break, there is great work being done. But in the main, progress is glacial.

For example, women are now holding more top roles in the UK’s larger firms, but often as non-executive directors. These are important jobs but they are not the day-to-day leaders of UK firms. The number of women running FTSE 350 firms has actually fallen in the last two years, from 18 to 15. It’s time for the leaders of UK firms to pick up the pace to close the gender pay gap and increase female representation in senior roles. All-male shortlists should always be challenged, interview panels should be mixed, and it goes without saying that people should be promoted on ability, not just experience.

And, while some sectors – such as the creative industries – are ahead of the game, companies must work together to consider how gender employment gaps in more traditionally male sectors, such as engineering and construction, can be improved. However, the gender pay gap will not be closed by action in workplaces alone. The Government has an important role to play, particularly in education. Businesses want to work in partnership with the Government on improving careers advice in our schools, better technical education, and offering affordable childcare for working parents.

We also need to see more firms inspiring the next generation. In education, more companies should be visiting schools, inspiring women to pursue STEM (science, technology, engineering and maths) subjects and taking up apprenticeships. Pigeon-holing young women and men into certain career paths is a practice well past its sell-by date.

No doubt there will be gender pay gap revelations tomorrow that make us hold our heads in our hands. But at least we will now know the numbers behind the problem, and that means action can be taken and progress measured. Tomorrow must be a catalyst for the Government and businesses to do things differently, working together to create genuinely diverse and inclusive workplaces for the 21st century.