Diversity, Equity & Inclusion

What is the Gender Pay Gap and What is the Significance?

Paul Brown
06.12.2021 Published: 06.12.21, Modified: 06.12.2021 14:12:32

The Gender Pay Gap is the name given to the disparity in pay between men and women in the workplace. According to ONS, ‘the gender pay gap is calculated as the difference between average hourly earnings (excluding overtime) of men and women as a proportion of men’s average hourly earnings (excluding overtime).’ While the gender pay gap has been closing over time, it still very much exists. According to Statista, in 2021, the gender pay gap was 15.4%, with younger women particularly affected. 

Why does the gender pay gap exist?

There is no single, definitive answer for why the pay gap exists but there are a number of contributing factors. Unconscious bias, fewer women in senior positions and women taking on the vast majority of caring responsibilities are just some of the reasons attributed to the pay disparity between men and women. Let’s take a deeper look:

Unconscious bias

Unconscious bias can affect women in all aspects of their career, from recruitment and salary, to how they are treated as an employee and career progression. Gender stereotypes such as ‘men are better with money’ or ‘women are more emotional than men’ can lead to women being overlooked for more senior, decision-making roles in favour of male colleagues. 

Fewer women in senior positions

There is still a significant gap in the number of men and women in senior positions. Research has shown that women are less likely to be promoted into senior roles than men and their career progression is much slower, particularly for women of colour. Research conducted by McKinsey found that women were underrepresented at every stage of the corporate ladder, with just 24% of C-suite positions held by women, which exacerbates the gender pay gap further. 

Care responsibilities and lack of childcare options 

In most, but not all cases, childcare responsibilities and caring for relatives primarily falls to women, which is why women are significantly more likely to end up in part time roles than their male counterparts. 

Taking career breaks to have children or care for sick family members can also cause women to miss out on promotions – and lack of flexible work arrangements can make it difficult for women to return to the workplace in a senior role. A survey by charity Pregnant then Screwed found that ‘72% of mothers have had to work fewer hours because of childcare issues’ and ‘51% do not have the necessary childcare in place to enable them to do their job’. 

Outdated recruitment processes 

Campaigners have urged employers to stop asking applicants for their ‘previous salary’ as it can contribute to the gender pay gap by keeping women in a lower pay bracket. Not only can asking about previous salary mean that women continue to be paid less than their male colleagues from job to job, but research has found that it can also have a detrimental effect on women’s negotiating position when it comes to salary. 

A survey conducted by the Fawcett Society found that ‘61% of women said the question had an impact on their confidence to negotiate better pay’ and ‘58% of women felt salary history questions meant they were offered a lower wage than they might otherwise have been paid’.

What is Equal Pay Day?

Equal Pay Day is the day in the year where women ‘effectively, on average, stop earning relative to men because of the gender pay gap’. It’s a campaign run by leading charity The Fawcett Society. In 2021, Equal Pay Day was Thursday 18th December. The purpose is to raise awareness of the challenges women face when it comes to equal pay and opportunities in the workplace, and to highlight the discrimination that many women experience.

In a statement on Equal Pay Day, the Fawcett Society’s Interim CEO, Felicia Willow said: “The pandemic has had a tough and disproportionate impact on women, in particular women of colour, disabled women and mothers,” 

“And now in addition to this, a widening gender pay gap paints a worrying picture. The government needs to take bold action, from improving childcare provision, making flexible working available to everyone, and tackling the rising cost of living.”

Women returning to work

According to Sarah Mavius, Head of Returners Programme at FDM, it’s important women returning to work are supported and re-equipped with the necessary skills to stay on top of changing needs within organisations.

“Following a career break, women can feel out of touch with current industry standards, terminology and technology, their career gap creating a confidence gap with many returning at a more junior level. Returner programmes are designed to support the successful transition back to work, building confidence, refreshing knowledge, updating skills and terminology enabling returners to re-join the workforce fully equipped for the right role at the right level. Returners are a rich, diverse, and largely untapped talent pool that can support businesses in closing their gender pay gap whilst bringing in a skilled, diverse and creative workforce.”

Read FDM’s 2021 Pay Gap Report to find out what FDM Group is doing to support women in the workplace.