Will publishing gender pay gaps bring about equality?

Transparency's good, but may not spur businesses to tackle the root causes of inequality.

by Adam Gale
Last Updated: 29 Jun 2017

No matter what they may say to the contrary, businesses will not have welcomed the government’s decision to force employers to publish their gender pay gaps. Unless you’re one the very few firms that do in fact pay men and women equally, it’s going to make you look bad: yes, a pay ratio of 90% is better than one of 60%, but it’s hardly something to boast about.

It’s perhaps unsurprising therefore to see that only 19 organisations have published their figures on the government’s website, something all employers of more than 250 people are obliged to do before April 2018.

They’re a mixed bunch. At one end of the scale you have big names like PwC, which has self-reported for years anyway, Virgin Money and the Department for Education. At the other, you have smaller organisations like bakers Bells of Lazonby, Longacres Garden Centre in Bagshot and and St Bartholomew’s School, Newbury.

(Top of the equality class, incidentally, were Longacres and Hall Cleaning Services of Prescot, where median hourly rates for men and women are the same. Female-led Virgin Money pays women 38.4% less by the same measure, while the Donaldson Trust pays women 15% more. For full details, see the government site.)

The idea is that forcing companies to publish their pay gaps will incentivise them to get their act together. Who really wants to appear to be a chauvinistic employer, after all?

The danger is that it oversimplifies. The gender pay gap has various causes which play out differently in different sectors and even different businesses. While firms can try to contextualise the headline numbers in their accompanying written statements, such details are hardly going to make the front pages. More likely than not, they will seem like an attempt to make excuses.

This becomes a problem if companies focus too hard on changing the numbers, essentially by gaming the system, rather than addressing the root causes of the gender pay gap in their particular case.

Research suggests, for instance, that the biggest single cause of the gap is not discrimination, or women entering less well-paid occupations or even men being more aggressive in seeking bonuses and promotion - important though these all are - but rather the motherhood penalty.

Put simply, taking time off work and then seeking out either more flexible or less demanding positions affects our promotion prospects in our 30s and 40s, exactly when the pay gap turns from a sliver into a chasm.  

Dealing with that requires a substantial rethink of how organisations view work-life balance for parents and carers generally, and possibly a broader rethink about the roles of mothers and fathers in society. There won’t be a quick fix in this regard that can narrow next year’s reported pay gap, so there’s a risk it will go unchallenged.   

Still, all things considered, it’s better for there to be an incentive for businesses to treat men and women more equally than not. It will certainly encourage them to be critical of their hiring, promotion and performance management processes, which can’t hurt.

Just don’t expect the numbers to change overnight - the structural and cultural causes of gender inequality run deep and die hard. But if we’re clever and determined about how we address them, there’s still hope for a fairer and more equal future, which ultimately would be better for everyone.  

Image credit: Mbiama/Wikipedia

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