In April 2018, legislation comes into force requiring every company with over 250 employees to publish its Gender Pay Gap. But how much do you really know about this historic step forward to gender equality? What are the implications? And how does it affect you?
We invited Helene Reardon-Bond into the studio to talk about the challenges, implications and opportunities of the Gender Pay Gap, and how excited she is – for the women of today and the generations to come – at the powerful steps being taken to drive us forward to pay parity. Listen in to this inspiring everywoman podcast to find out more…
Transcript
Anna: Hello and welcome to the everywoman Podcast. I’m Anna, editor of everywoman. Every month we’ll be bringing you the stories, insights, and opinions of inspiring women in business on a wide range of topics. We’ll be asking the questions that you want the answers to and, doubtless, prompting some more in the process. Today we’re looking at the gender pay gap, something that has been top of the news agenda recently and looks set to continue to be. It’s nearly half a century since the Equal Pay Act was passed, and finally, in April a clause of the 2010 Equality Act will come into force requiring every company with more 250 employees to publish its gender pay gap. The results look set to make an interesting and controversial reading. In the studio today, we’ll be joined by someone who knows all about it, Helene Reardon-Bond, former head of Gender Equality Policy and Inclusion at the Government Equalities Office, and a leading expert on gender inequality and how to progress women in the workplace. Helene Reardon-Bond, welcome to the studio.
Helene: Hi, Anna. It’s nice to be here. Thanks.
Anna: Why has it taken so long for the gender pay gap to be addressed and, specifically, for this clause to come into force?
Helene: The Office for National Statistics have been measuring the gender pay gap for many years. It has gone down, but it’s kind of stalled. That was really the impetus for it to be included in the Equality Act 2010. It was put within the provisions of the Equality Act, and then not enacted because the coalition government said they wanted to take a voluntary approach. This voluntary approach was called Think, Act, Report, which was trying to gear companies to publish their gender pay cut report. It didn’t really have an impact. Hardly anybody published at all. As a consequence of that, the government decided that it had to take stronger action and bring in its Section 78 of the Equality Act. That’s the history to it really. One thing that I would say is, the gender pay gap is completely different to the equal pay. Absolutely everybody gets those two things confused.
Anna: For those who are listening, can you just sum that up really briefly so that the people are very clear.
Helene: Sure. Equal pay is when you get men and women in an organisation doing the same job or similar job or job of the same value being paid differently. That will be all the stuff that’s been in the news about the BBC recently. Alternatively, the gender pay gap is the difference between the average man and the average woman’s average earnings within a company. What causes the gender pay gap is really three basic elements very simplistically. The first element is that women tend to go into quite traditional roles. They don’t enter what we call STEM, science, technology, engineering, and math subjects, which are more highly paid. That probably accounts for about a third of the gender pay gap.
Helene: The other third is time out of the workforce, which is the consequence of having children. Women progress at a slower rate than men or they actually take time out. That has a huge impact because, when they go back, they never really get their foot back on the ladder. There’s a statistic that says, on average, women lose about 2% in terms of their salary over their lifetime for every year they have out on the labour market. We could probably do a lot more about educating women about … Although, it’s difficult when you have a baby trying to hang on in there. Obviously, educating employers how to do better with women coming back from maternity leave.
Helene: The other third is kind of unknown. That’s where discrimination kicks in, and also equal pay. That’s the least known obviously. I think the great thing is that these new gender pay gap regulations are really making sure that companies are wrapping their heads in cold towels, looking at all their analyses, and for the first time it’s being really discussed at senior levels within business. Boardrooms are looking at their gender pay gap.
Anna: I mean, is this a result of the fact that it has been mandatory? I mean, is it a bit disheartening the voluntary … Looking at this in a voluntary manner didn’t really take off. Why is that? Also, do you think that this mandatory thing will mean that people are looking at it and that it will eventually be a positive for business as well as for individuals?
Helene: Yeah. I think it’s going to be a tremendous moment. Sam Smethers from the Fawcett Society said, “I think that these regulations, the gender pay gap reporting regulations, will probably have more of an impact on women’s salaries over their lifetime than equal pay did.” It’s quite forensic, it’s quite detailed. Companies have to do their calculations. Let’s remind us that it also includes the bonus gap as well. Some companies are reporting a 70% bonus gap, which is huge. Yeah.
Anna: It’s not something you can justify when the cold hard figures are there, is it?
Helene: No. I agree with you, Anna. I also think, if you think about it, that’s a significant amount of somebody’s earnings.
Anna: Absolutely. 70% is quite extraordinary. I want to come back to this idea then of the social issues that underpin the gender pay gap. You’ve talked about the traditional roles, the lack of women in STEM. Maternity is a big one. I mean, that is one that we are yet to resolve, I think, in any sort of meaningful way. What do you think that we could do, or that as a society we should do that would have the most significant impact on the gender pay gap other than this mandatory reporting? How will it change?
Helene: It’s obviously multi-layered. If there was one silver bullet, I think we would have done it years ago. Clearly, I think, getting more girls into STEM subjects is absolutely key. We’ve seen quite an uplift in that, but not enough. As an example, only 16% of all engineering graduates are women. It’s tiny. Then, of those, not all of them stay in the workplace because it’s quite unwelcoming in some of those industries, although, some companies are doing really well. Clearly, we’ve got to engage more young girls to think about going into STEM industries is a good move. I know, for instance, everywoman have got a great programme called Modern Muse.
Anna: Yes. Modern Muse.
Helene: Which I’m delighted to be a trustee of. That’s really about giving young girls role models that they can aspire to. Not only that but also work out what do I need in terms getting GCSEs or whatever. What kind of apprenticeships or what kind of companies can I do to enter those areas? Clearly, there’s a lot around that piece. Some of the more enlightened employers are doing fantastic outreach programmes on that. The other thing is obviously making sure that I think, businesses really understand the business case. The Women’s Business Council have done some fantastic work around this.
Helene: I think the thing that I always remind people of is that McKinsey estimates that bridging the gender pay gap in work would add 150 billion to the UK economy by 2025. When you think about us living in Europe, we need to absolutely capitalise on the potential of women in the workplace. Charter Management Institute say only 35% of all middle managers are women. That actually shows you it’s not all about the top end. Women aren’t even getting into the middle.
Anna: Right.
Helene: There’s a whole piece there around what employers can do. That’s why I think the gender pay gap regulations are absolutely vital. For the first time, as I said, employers are sitting down forensically looking at their data and trying to look out, “Well, where in my company can I really focus myself and make the best intervention I can?”
Anna: Then, as you say, looking at that and then looking at the figures from McKinsey, I mean, equality makes sense. It just makes sense. It’s not even a moral imperative anymore. It just makes sense, business and in all ways. I wanted to talk to you about … Harriet Harman said in an interview recently, and I quote, “With the pay thing, the dam has burst because there’s a statute requirement to disclose. You’ve got a choice. You either perpetuate it or you change it, and the transition will be ragged.” She also mentioned that the obvious danger is that the figures will be published and women will be furious for well and nothing will be done. We’ve obviously talked about what will happen in the ideal. How do you actually see things progressing from the April disclosures? Will it be a slow burn?
Helene: I think, in fairness to business, it will be unusual for a company not to have a gender pay gap. That’s right across the piece in the public sector and in the private sector. Everybody is going to have a gender pay gap. Ours is 18.2, that’s the average in the UK. What matters is really what happens in years two, three, four, five, six. Companies need to be working on the areas of intervention where they can help their employees close that. I think that really is where companies will really focus on. I think that now employers really do get the business case. They really do understand that they need to capitalise on all their workforces, all the people in their workforce. Also, if you look at it, women are highly educated. Women account for nearly about 60% of all the degrees in this country. What kind of organisation would throw away that kind of talent? There’s a huge cost to not retaining that talent.
Helene: We’ve got some policies now. We’ve got shared parental leave where mothers and fathers can decide between themselves who’s going to take more time out of the labour market to bring up the children. Some of this is laid at the door of employers, which, in a way, is a bit unfair because some of it is societal challenges. That the woman has always cared for the baby. Things are changing. I know that my own son has always seen me work. He’s seen me probably be like the hamster on the wheel. His expectations will be different in his partnership. That goes across the board for all younger men as well. I think that their expectation is that they want to be much more engaged with their children. That kind of societal change will have a massive impact.
Anna: Yes. I mean, obviously, [inaudible 00:11:39] take sometimes a generation or two to sort of filter through, don’t they? I can’t remember. I think it was … When did they project that the gender pay gap would close?
Helene: Oh, well, there’s lots of different figures. It runs into nearly a hundred years. I mean, what we should remind ourselves is that even countries like Sweden and Denmark, which have had really progressive gender equality policies for a lot longer than us, and they’ve been focusing very much … For instance, Sweden’s got a lot more women engineers and things like that. They’ve still got a gender gap. It is societal challenges about childcare really that have a massive impact. It’s still predominantly women that look after children and take a part-time role, which has an impact on their earnings. The part-time gender pay gap is much bigger. It’s about 40% if you work part-time. Whereas, the full-time [crosstalk 00:12:47]. I was going to say …
Anna: No, you’re good.
Helene: The full-time gender pay gap is 9.1% for full-time workers.
Anna: 9.1. Yeah. Do you think then we need to make that a very clear distinction then when we’re talking about it? It is a very opaque subject. Like you say, people get mixed up between equal pay. Then there are the figures that can be slightly skewed if you’re putting part-time and full-time work together. I mean, we have to be quite precise about what we’re talking about, don’t we?
Helene: Yeah. I think the thing is, for the average woman in the UK, the Office of National Statistics say that she is earning approximately 80 pence to man’s average one pound. That’s what’s happening over a woman’s lifetime. It has massive implications for the government. It means that women end up being the poorer pensioners as well and more reliant on state help. There’s lots of reasons, lots of good reasons, why we need to close this. The biggest reason, I think, for the employer is who would want to waste all that talent?
Anna: What do we want our young women coming up, our daughters and their daughters and subsequent generations, what do we want them to be expecting from their work and from their remuneration?
Helene: I think that’s a really good question. I think what we want them to have is parity. If they are as qualified, as experienced, you’d expect them to have parity of pay in the workplace. Unfortunately, we’re seeing it played out constantly on the front of the newspapers and the social media that that isn’t happening. We’d expect them to have parity. What I would also hope is that this whole debate around the gender pay gap has really raised their awareness of the steps that they can take themselves to make sure that they don’t fall foul and that they don’t sleepwalk into careers and then pay the financial penalty afterwards. Or, they’re more robust about their expectations in the workplace.
Anna: I want to come onto that. I wanted to ask you what we can do as individuals and what, going forward, people can do as individuals to help plug up the gender pay gap. I just wanted to pick up on this idea of the fact that we want them to assume parity. It’s quite interesting. A bit of anecdotal research, I was asking people actually pre to BBC … These are educated women of my acquaintance. Did they know what the disparity was? Most of them seemed quite aware of it before then. I mean, it’s obviously flourished in the dark, and perhaps not for any nefarious reason, but the lack of knowledge about it. I think a lot of women possibly didn’t realise the extent of the disparity. Would you say that’s true?
Helene: I think you’re absolutely right. The average person would not realise anything about the gender pay gap.
Anna: Not all female actually.
Helene: No, exactly. But you can’t get away from it now. It’s constantly in the headlines as a result of the regulations, which is something I’m really proud of actually. I do think that women will make much more conscious decisions in terms of their expectations around their salary in the first place when they’re going a job, in terms of their promotion prospects. A big thing I think that makes a huge difference to women is flexible working. I know that’s a conversation that some women find difficult. Everybody in the UK has the right to request flexible working. That’s what I think makes a difference.
Helene: When you’re trying to progress in the workplace, particularly if you’ve got family, it’s absolutely crucial that you try and secure some form of flexible working. Some employers absolutely get it and are really flexible. Nowadays, we’ve got such fantastic IT there’s not really a huge amount of obstacles to working more flexibly. I think really understanding how flexible working, particularly when your children are young, how that can keep you in a job that you really like, that you’ll feel fulfilled in, will just make such a difference.
Anna: I mean, as you say, it just seems that everything is part of a very big jigsaw puzzle that is shifting as we speak. It’s exciting times. I mean, are you excited?
Helene: I’m really looking forward to this. I think it’s just going to make such a difference to employers’ attitudes. I think the employers who previously let many women go because they didn’t want to give flexible working, they’ll be looking again at their policies and thinking to themselves, actually, maybe we do need to be a bit more radical here and think about the different types of flexible working. It’s not all about working from home. It could be term time. It can be job share.
Anna: Compressed work and things like that.
Helene: I remember my old team. I had the highest level of flexible working because I didn’t care when they did the job, as long as it was done.
Anna: You were results-focused rather than the old idea of [crosstalk 00:18:17].
Helene: It was a really high-performing team that I was really proud of. They worked flexibly.
Anna: Do you think people rise to that?
Helene: Yeah, because they appreciate it.
Anna: Yeah.
Helene: I think you get back so much in terms of loyalty. I used to say, “Don’t worry. Stay at home. The kids are ill, but talk to me.” They would end up working later because they just appreciated that they didn’t have somebody was like, “Well, okay then. This isn’t very satisfactory. I’ll remember this.”
Anna: On the subject of obstacles, what lessons would you pass on to line managers? I mean, let’s talk about facts like unconscious bias, for example.
Helene: I think that’s a really good question, Anna. In terms of unconscious bias, I think often line managers … I know I’ve done it myself. We make decisions on behalf of our teams, and we don’t realise or appreciate the massive impact that will have on the gender pay gap or on that person’s career over their lifetime. For instance, I’ve had opportunities that come up and I think, “Oh, there’s a lot of travel involved. They might have to go to Brussels. They might have to go to the UN.” Then I think, maybe I wouldn’t offer it to that person because they’ve just come back from maternity leave, and they’ve got this little baby that’s crying at night, and I can remember how that feels.
Helene: Whereas, what I should have done is actually sat down and said to that person, “Look, there are these opportunities coming up. I know you’ve had a baby. It might be difficult. Please go home and think about it. Do you want to do it?” They are the big, sexy, interesting, high-profile jobs that will get the person to progress up the ladder. I really think that we need to do a lot more in terms of don’t make assumptions about the people on your team. Give everybody opportunities and let them make the decisions about whether or not they want to take that pressurised job that make it for them.
Anna: A couple more questions. What’s the biggest question that businesses ask you regarding the gender pay gap?
Helene: I think, at the moment, the biggest concern is because it’s the very first time we’ve done it. The biggest concern is, most companies out there have done their calculations, and they’re now worried about the communications around it. That, for sure, is the biggest issue. The communications really focuses on will their competitors’ figures be higher or lower than theirs? There’s a big reputational issue for them. The other big question, I think, is how will this be received within my workforce? Will women think badly of the organisation? Will some of the senior women jump ship and go to a competitor who’s got a lower pay gap? A lot of them are looking at that. Hence, I think, they are working with organisations like everywoman to work out what the offer is in terms of the gender pay gap and how they can close it within their company.
Anna: There’s a big communications piece around this?
Helene: Yes.
Anna: This has to happen after their reporting to ensure that the information is taken and then moves forward rather than stops.
Helene: Sure. Yeah.
Anna: What do you say to them? Is that what you say?
Helene: I try to reassure them and say, “Everybody will have a gender pay gap. It’s when you do the calculations and then work out what action you’re going to take to close that. Then communicate that really clearly.”
Anna: Last question. Just as a takeaway for anyone listening to this, mind reeling with the implications of all of it, what should we all bear in mind as women about the gender pay gap and about the new landscape that is about to unfold?
Helene: First of all, I think, don’t confuse equal pay with the gender pay gap. As I said, it’s a bit more complex. It’s got a lot more factors involved. I think it’s really about reflecting on your career decisions and on your pay expectations. Don’t be put off by a company what might have a big gender pay gap. Most of the best companies are actually publishing reports on what they’re doing to close it. Have a look at those reports. There’s been some really interesting things from companies. That’s why I would say don’t be put off if they’ve got a gender pay gap. Have a look at what they’re doing to close it. I’ll bet you some of them are working really hard and they’ll still be great companies to work in.
Anna: Fabulous. Helene, it’s been a pleasure having you with us. Thank you so much for sharing your insight into the gender pay gap.
Anna: Thank you all for joining us today on this everywoman Podcast. We look forward to continuing the conversation with you next time. Don’t forget, in the meantime, there’s a wealth of information, interests, and further talking points on the everywomanNetwork and the app if you want to access on the move. Until we meet again, have a great day and keep on living your best life.
