The trouble with women

There have been many revolutions in the workplace - hierarchies flattened, 360-degree appraisals, remote working, flexitime, the internet ... Yet the gender pay gap endures and the statistics still shock. The reasons are complex, subtle and deep-rooted, but perhaps female staff could be more proactive. Emma De Vita searches for the road to equality.

Last Updated: 09 Oct 2013

It's 1975. The Kevin Keegan perm is the height of fashion, the air is heavy with Old Spice, and Wonder Woman is getting ready to kerpow on to our TV screens. Margaret Thatcher wins a land-slide victory to become leader of the Tory Party. And the 1970 Equal Pay Act comes into force, with the heroic aim of wiping out the 30% pay differential between men's and women's earnings.

Thirty-three years on and Britain has had its first female prime minister - yet there are just three FTSE-250 female CEOs, and the pay gap is running at a stubborn 17%. With all legal impediments removed, who'd have thought that women still wouldn't be getting what they deserve? Wonder Woman, where are you?

'It's a lot better than it was 30 years ago,' insists Baroness Denise Kingsmill. A non-exec director of British Airways and author of a 2001 review of women's pay and employment, she has long been banging the equality drum. 'One keeps having reason for optimism - hoping to push the peanut forward, so to speak.'

But the peanut ain't budging. Despite the high-heeled strides made towards pay parity, if things carry on as they are, says Baroness Margaret Prosser, deputy chair of the Equality and Human Rights Commission, it will take another 20 years to bridge the wage divide. Only last month, a Select Committee report urged the Government to 'take more seriously' its efforts to eliminate it.

Britain's gender pay gap is the largest of all 27 EU countries, according to Eurostat. The Office for National Statistics says it is most marked at senior management level, where women earn 27% less than men. And a recent study by the Institute of Directors shows that the divide goes all the way up to the board - the pay gap between male and female directors widened over the past year from 19% to 22%.

The statistics make tasty headlines, but they shouldn't be swallowed whole. This isn't simply about overt sexism - the pay-gap story is an ambiguous one and needs some chewing over. It's a complicated tangle of unhelpful societal norms, unconscious workplace bias, low female expectations and the tug-of-war between family and work.

One of the most popular explanations for it centres on the type and level of work women do - jobs in the caring, catering and public sectors, where pay has always been low. Well-remunerated industries like energy and engineering are filled with men. 'Occupational segregation' is the term for it. 'How that comes about,' explains Kingsmill, 'is partly because of social conditioning, partly as a result of education and partly because of the absence of role models in certain jobs.'

And far more men hold positions of authority than women - only 35% of managers and senior officials are female, while women hold 78% of the admin and secretarial positions (Office for National Statistics). When women do hold high-status jobs, they tend to be in 'pink' industries rather than 'blue' ones - a senior lawyer in the NHS, say, rather than in a City firm.

Shirley Dex, professor of longitudinal social research at London's Institute of Education, has been examining the wage-growth patterns of men and women. By looking at a group of people born in 1958, in full-time work at the ages of 33 and 42 (where you might expect men and women to be treated equally), her team found that, on average, men's salaries grew by 22% over that period, women's by 16%.

'Even when you take women who are the closest possible comparators to men,' says Dex, 'men are still drawing ahead with their wages over their thirties, even when they're in the same jobs. It's not because of domestic commitments; it's more to do with the fact that women are doing similar jobs but they are not located alongside men.'

But the pay gap doesn't start in your thirties, it begins before you graduate - as a result of the different ways in which men and women accept their first job offer.

Linda Babcock, professor of economics at Carnegie Mellon University and co-author (with Sara Laschever) of Women Don't Ask (Princeton University Press, 2003), analysed the starting salaries of postgraduate students. She found a huge difference in the number of men and women who negotiated. Only 7% of women thought to ask for more money when landing their first job, compared to 57% of men. On average, the men won a 7.6% higher offer than the women.

This is significant, because the salary you start on is the figure you negotiate from for the rest of your career, so even a small initial rise produces a big difference over a lifetime. Say a woman starts on £25,000 and a man on £30,000 for the same job, over their 28-year working life each enjoying a 3% annual pay rise. The man will earn £300,000-plus more than the woman. That's a nice city apartment, a second home abroad or a tidy pension.

But it's not just about asking for more - it's also about how high you set the bar. A 2007 study of UK graduates by the Higher Education Statistics Agency showed that, three and a half years after graduation, males earned on average £1,000 more than females. But although a higher proportion of men were in higher-paid work, they were also more likely to be unemployed. This could indicate that women are more likely to accept a job below their expectations and work up from there, whereas men would rather be unemployed and searching for that perfect job.

So does the pay divide come down to the different attitudes of men and women? Do men take risks, have higher expectations, push for more money, have more confidence; while women fail to ask, are less confident, shy away from negotiations, and are more naive?

'Men do more about pushing for money,' says Jonathan Chocqueel-Mangan, a partner at headhunter Heidrick & Struggles. 'When they get a job offer, they assume it's an opening position; that you pay someone what you can get away with rather than what they're worth. I don't think women think like that.'

Could it be that some companies take advantage of the fact that women come cheaper? 'Some organisations blatantly work on the basis that women don't ask,' says professor Susan Vinnicombe of Cranfield University. 'They can save themselves some money.' Is this why women still earn less than men, despite being promoted earlier?

Women are much less likely to ask for a pay rise, either because they feel undeserving of one ('I wouldn't dream of asking!' is a common comment) or fear that uncomfortable negotiations could damage their relationship with their boss. It's such an unpleasant or hopeless prospect for many that they seek to increase their salary by changing jobs instead. 'That seems to be an easier kind of behaviour for women to engage in rather than just demanding a pay rise,' says Vinnicombe.

Babcock and Laschever write that 'women often worry more than men about the impact their actions will have on their relationships. This can prompt them to change their behaviour to protect personal connections, sometimes by asking for things indirectly, sometimes by asking for less than they really want, and sometimes simply by trying to be more deserving of what they want (say, by working harder), so they get what they want without asking.

'Women's methods can be superior to those typically employed by men. Unfortunately, however, in our largely male-defined work culture, women's strategies can be misinterpreted and leave them operating from a position of weakness. And in many cases, the only way to get something is to ask for it directly.'

Not all women are happy doing that, and perhaps for good reason. A study of videoed negotiations by men and women using the same script showed that both sexes thought the female negotiator wasn't very nice and that they wouldn't want to work with her, whereas the male negotiator's behaviour was perfectly acceptable, because that was what was expected of him. 'Women intuitively know that if they're perceived to be a tough negotiator, they are seen as a wicked witch or worse,' says Jan Babiak, managing partner at Ernst & Young.

Pushy women aren't popular - and that shapes the way females operate in the workplace. Many women prefer to keep their heads down, quietly busting their guts in the hope that their efforts will be noticed and fairly rewarded. Usually, that doesn't happen without a degree of self-promotion, particularly in a male-dominated environment.

'Most men appear over-confident, but they are hugely insecure and so their need to tell everyone how brilliant they are is actually a defence mechanism,' says Chocqueel-Mangan. 'In many instances, women aren't actually insecure enough at the top levels. A lot of women I meet in the upper echelons are actually pretty happy with what they're doing and don't feel the need to go around boasting to everybody.'

Says Sarah Gold, managing partner of ad agency CHI & Partners and one of MT's 35 Women Under 35 in 2006: 'I have never really asked for a pay rise or promotion. From that you can deduce, I suppose, that I have either been very lucky or am an extremely ineffective negotiator. My point of view, however naive, has always been and will always be: do a good job and the promotions and pay rises will come as you make yourself indispensable to your employer and your clients. At the end of the day, no-one wants to reward a self-obsessed, overly competitive whinger.'

And, remember, money isn't everything. 'If you're happy with the deal right then, that's fine,' says Sally Schofield, a director at mining company Latitude Resources and another of MT's 35 Women Under 35 (2006 and 2007). 'It's not all about salary, anyway; you have to look at where you are, where you want to be, how you are going to get there - and enjoy yourself as you go along.'

But whereas Gold's and Schofield's attitude has clearly paid off, other women might decide that keeping quiet is an intelligent response to the unconscious bias they experience from colleagues of both sexes in the workplace. Deloitte ran some research into this. In 1991, only 5% of its partners were women. The problem was not attracting women to the firm but keeping them once they reached management level, where female staff turnover was 33%. The assumption was that the women were leaving to look after children, but, to its surprise, Deloitte found that they were leaving to join rival firms.

When polled, the women cited Deloitte's male-dominated culture as the problem. If a woman was late for a meeting, it was wrongly assumed that she must have been having childcare problems. It was also wrongly assumed that women didn't want to travel (necessary for promotion), and - perhaps most unfairly - when it came to partner interviews, women were judged on their current performance, whereas for men it was their future potential.

It's an attitude endemic to many organisations. 'One has to recognise there is an element of discrimination,' says Kingsmill. 'Unconscious, I'm sure, but it's the kind of discrimination that's involved with people-cloning. "He reminds me of myself as a young man, let's take him on." They get fast-tracked.'

Paul Myners, chair of both the Guardian Media Group and Land Securities and former chair of Marks & Spencer, admits that 'there's still some residual discomfort among older people that is denying organisations the best talent in the company'. He has often been given candidate shortlists for senior posts with no women on them and has had to ask for some reflection on why this might be - often resulting in a female being added.

'In my experience,' he says, 'women who are on boards have a superior performance to men because, to have got to where they are, they've experienced bias and they have to be even more talented than the men.'

In a bid to understand why more women weren't making it to senior levels, investment bank JP Morgan did some research in 2006 with City University into the unconscious bias women face in the workplace. Part of it looked at the language used by managers to describe top performers. 'Success tended to be described using predominantly masculine language,' says Carol Lake, head of diversity. 'Both men and women used phrases like "punches above their weight", which may not always be relevant for top-performing women.'

The bank decided to run training courses for its European MDs to help them understand how conversations about performance, success and progression can be skewed by this.

A lot of women don't conform to the traditional career model. Many who choose to have families and are expected or want to do the lion's share of the caring are prepared to step off the career treadmill for a while in the hope that they can step back on in due course. Some come back full-time, facing the risk of the 'mummy track' - as the second-rate career is termed - while others choose to trade down the number of days for a cut in salary. The question they've asked themselves is: what's more important, time or money? Others, whose employers refuse to take them back part-time, decide to seek less well-paid but more flexible work. And some realise that they don't want to make the full commitment in time and effort that a senior job demands.

'People make that "choices" argument a lot,' says a spokeswoman for the Equality and Human Rights Commission. 'There's no doubt some women are well educated and have ambitious career prospects yet choose to stay at home with their children. But you have to wonder how widely this argument can be used. Do many women feel they have to make a constrained choice? How many women would carry on working at a higher level if they had more flexibility in their job?'

But not every job affords flexibility - and women know that. For many, it's about pushing a door that's slightly ajar. You get what you can - and, often, enlightened employers will give it. And the women, many of whom are pioneers in their organisations, are grateful for it and so don't want to push too hard.

Joanne Gubbay, a City lawyer, is one such pioneer. In 1994, she negotiated a four-day week at law firm Berwin Leighton - an arrangement unheard of at the time. 'It doesn't sound very part-time, but in the 24/7 City environment, it was.'

She was allowed to work a reduced-hours week but was told that a partnership wouldn't be available to her. 'I was left in no doubt that I'd be putting myself into a career cul-de-sac. And 14 years ago, because it was unusual, I was so grateful to be allowed to work part-time that I didn't challenge the principle. There's still a recognition that if you want to work flexibly, there's probably a price to pay - which could be status, quality of work or shelf-life.'

So where does this leave us today? The problem has business schools, organisations, consultancies and women scratching their heads. 'There's no silver bullet or quick fix,' says Myners. 'It's about dogged determination.'

He reckons there will be parity among men and women at senior levels in larger organisations within the next 50 years. But can UK plc wait half a century? For some, mandatory pay audits are the way to speed things up - though the idea would make most CEOs blanche. It might be OK for the public sector, where jobs are graded and it's easy to compare like-for-like work, but it's a different matter in the private sector, where merit and experience are individually rewarded and the idea of revealing what you get paid to your colleagues is like sharing the news that you've got piles.

'I don't believe companies should be transparent with salaries,' says Schofield. 'Having managed a team of 60 people, total transparency would have made life very difficult.'

But aren't people entitled to know what they're worth? 'The bonus culture is very negative from that point of view,' says Kingsmill. They're usually decided in secret, probably on the golf course, which isn't usually where women like to spend their time.

One of her report recommendations from 2001 was that pay audits should remain voluntary for the time being, but that if there hadn't been significant take-up within two years, serious consideration should be given to making them compulsory. Just 25% of companies do them. 'I now believe they should be mandatory,' concludes Kingsmill.

This is the stick, but is there a carrot? The business case for having more women in teams at every level is now taken seriously by smart organisations. A board might say it wants to change things, but is the sentiment shared by line managers, who don't have the time, energy or inclination to cope with a fundamental shift in thinking?

'Advocacy from senior leaders is invaluable,' says Lake at JP Morgan, 'but what women experience through their relationships with their immediate bosses and colleagues is where the rubber really hits the road.' You can smell it burning. 'While I believe supportive policies are enormously important,' she adds, 'we need nothing short of a cultural revolution to make sure that women who make it to the top are not just the exception but are simply exceptional.'

Kingsmill argues that if you have more women at the top then you get more role models able to influence the direction of a company, and real change can be brought about - it's critical mass that is needed. 'What I can't bear is going into an organisation where the only women there are PAs, you don't see any women occupying senior positions of responsibility and it is all too depressingly familiar.'

A way to change this is to do what most enlightened companies are doing, when they can - offering flexible working and quality part-time work to those of both sexes who want it. And there are an increasing number of men who do, particularly among the younger generation, who do not so readily fit traditional career models (see feature on p40).

'We mustn't be thinking about flexible working as a women's issue,' adds Kingsmill. Men want work/life balance too, as MT has long attested. To lawyer Gubbay, today's situation is quite different from that prevailing when she first asked for flexible working.

'Gender is a much lower barrier to the advancement of talent than it ever has been in the history of business and management,' says Myners, the father of four daughters. 'I'm all in favour of female advancement and certainly have endeavoured to be so in my career.'

Business and government might think the problem is close to being solved, but many women are still negotiating their way across the pay crevasse and into the valley of plenty. And, unlike Wonder Woman, most don't have super powers to help them get there - not yet, anyway.

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