What is the ethical issue?

The gender pay gap represents embedded discrimination, stereotypes and barriers in opportunities for women. To much of the public, the gap’s existence in business is a problem that needs rectifying.

With greater accountability and transparency now required of organisations, opportunities need to be taken to highlight steps implemented to close the gap within companies. There are serious reputational risks with having a large gender pay gap, as well as the potential to alienate women in both recruitment and internal progression.

Exhibiting disparities in pay due to gender reflects negatively on an organisation, particularly if it is not accompanied with adequate steps of addressing the issue that will reap results. Failure to do this can display to external stakeholders a non-progressive mindset within the business, and can have wider ramifications for recruiting talent from other diverse backgrounds. If there is a pay disparity between men and women, and a passivity to address this, it may be likely that the same could happen to those with disabilities, or from different ethnic backgrounds.

Gender pay gaps are the outcome of economic, cultural, societal and educational factors. On average, women are paid less than men on an hourly basis, across sectors. This gap has been an issue of focus in recent decades, as activism has grown and the gender balance in historically male-centric sectors has grown. Gender pay gaps stem from the perception of full-time work as being of the greatest value, occupational segregation, and the undervaluing of women’s work.

Gender pay gap reporting has become a legal requirement for all UK organisations with 250 employees or more, with private and voluntary sector organisations able to include a narrative statement alongside their figures outlining the reasons behind the gap and actions being taken to rectify it. Reporting is making organisations more accountable for closing the gap. Monitoring from the Global Gender Gap Report has shown that, overall, the gap has been reduced by 3.6% since 2006. Yet, with current progress, the overall global gap is predicted to take 108 years to completely close.

IBE Guidance

A summary of good practice

• Figures from the Confederation of British Industry’s (CBI) employment trends survey show that 93% of businesses are taking action to close the gender pay gap and increase diversity within their workforces. Companies are recognising that building a diverse workforce, which is treated fairly, helps attract and retain staff and increases the variety of skills in a workplace.
• With regards to reporting, it is important to be open and accurate. While some of the causes of the gap remain outside of an organisation’s control, people will increasingly expect you to be taking action to close the gap. Doing so will benefit individual businesses and the economy as a whole.
• Actions for addressing the gap will vary between sectors and individual businesses. Some will need to focus on breaking down horizontal occupational segregation, others on getting more women into senior positions. Organisations should aim to implement measures that will result in unpaid care being distributed more evenly between men and women, the elimination of occupational downgrading or stalling as a result of motherhood, all women being provided opportunities for career progression on par with male colleagues, a gradual elimination of occupational segregation and a reward system free from gender bias. Organisations will then be better placed to report accurately and effectively on actions that can positively close the gender pay gap.

Further resources