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3 Apr 2018

Dr Elli Siapkidou, Director of Research, Equileap

Girls just want equal pay

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In 2016, the World Economic Forum estimated that with the current rate of change, it would take 170 years to achieve gender equality in the workplace. In its report published one year later, the estimate was extended it to 217 years, implying that change is slower than first expected and progress seems to have gone into reverse.  

Although women represent 50% of the global population, they are treated worse than men and are paid less. Female graduates are entering the labour force at a lower pay than their male friends, they get promoted at a slower pace and by they time they reach their 30s, and become mothers, they are paid at least 10% less than their male colleagues. When they return to work after maternity, their chances of getting promoted are getting slimmer and become minimal if they choose work part-time or from home. By the time women have retired they receive half the pension of their husbands. Women are second-class employees, while achieving gender equality would contribute $12trillion to the global GDP by 2025. 

It is urgent that we accelerate progress towards gender equality in the workplace. In the last year, we have seen positive steps. The term “gender pay gap” has dominated public debate and has captured the attention of mainstream media. Exposure of gender pay inequality in Hollywood and in BBC in 2017 and early 2018 are examples which have lead to the gender pay gap being a hot talking topic in recent months. Social media campaigns adopting the hashtag #EqualPay have further exposed workplace inequalities across the globe and reignited debate surrounding this critical topic. Anecdotes abound of male-dominated management teams, female managers discovering that they are being paid less than their male subordinates and women consistently being shunned of promotion. 

Additionally, Iceland’s recently enacted law banning unequal pay for equal work, Germany’s new Pay Transparency Act and the UK’s legislation which required companies to publish the gender pay gap are key developments that have opened the debate on what governments can do to promote gender pay parity in the workplace. 

However, it seems that companies are dragging their feet and are not following this movement of change towards ending pay discrimination in pay. Research conducted by Equileap (a non-profit organisation with a mission to accelerate progress towards gender equality in the workplace), which focused over 750 publicly listed companies from around the world, shows that most of the companies do not report on their gender pay gap. An overwhelming majority of companies opt for declarations that they are paying equal pay to women and men, blog entries stating their belief in ending pay discrimination but fail to provide any evidence. Unless they are obliged to (as is the case currently in the UK), most corporations do not publish gender-segregated information. The exact figures will be published in April 2018 by Equileap.  

Transparency is key in holding companies and managers accountable for their practices. “We need more transparency, better data, so that we can distinguish the best performers from the worst, and drive investment towards companies that put men and women on an equal par”, says Diana van Maasdijk, Co-Founder & Executive Director. 

Governments can play a key role in creating an environment that promotes transparency on pay and demands equal pay for equal work for both genders. Iceland’s recently enacted law on Equal Pay Certification is the best solution so far to eliminate gender discrimination regarding pay. It has taken a focused approach to banning an unjustifiable practice by implementing independent, government-approved certification and punitive measures for failing to comply. 

Companies also bear a responsibility to work in parallel or even ahead of legislative requirements in the countries where they operate. As part of being socially responsible and in line with GRI guidelines, companies should be transparent and disclose pay information. The best way to do that is by sharing gender segregated information on pay by level / employee category, rather than the average / mean number, which can be a misleading value. The company should then take actions to achieve an equal or less than 3% gap at each level / occupation company within the company with recurrent checks.

An example is offered by Energy Australia, a private electricity company based in Australia, which announced it would spend $1.2 million to boost the pay packets of 350 women who were getting less than their male counterparts and claimed to have closed the pay gap literally overnight. It is the only way to move forward and not wait 217 years.