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

Publication type: Business ethics briefing

Business Ethics in the News 2019

This briefing provides an overview of the ethical concerns and lapses that were recorded by the IBE in its monitoring of media coverage in 2019. It gives an overview of which sectors and issues related to business ethics were most covered in the news. For 2019, we have recorded a total of 361 different stories involving lapses of companies with a UK presence.

29 January 2020

Publication type: Survey

Attitudes of the British Public to Business Ethics: 2019

The 2019 results of the IBE's annual survey of the attitudes of the British public to business ethics.

17 December 2019

Webinar

What are the hot ethical topics E&C practitioners need to know?

03 June 2019

Publication type: Other

A Year In Review: Ethical Concerns and Lapses 2018

Read the IBE's annual analysis of business ethics news stories from the last year - which were the sectors and issues most in the news in 2018?

30 January 2019

Publication type: Survey

Attitudes of the British Public to Business Ethics: 2018

The 2018 results of the IBE's annual survey of the attitudes of the British public to business ethics

13 December 2018

Case study

Does gender pay gap reporting ask the right questions?

As part of our work at the IBE’s Research Hub, we are collating Gender Pay Gap reporting figures and analysing the narratives. The ethical issues which underlie the disparity in gender pay gaps are those of choices and opportunities, and we are reviewing organisations’ narratives with interest.

20 April 2018

Publication type: Survey

Attitudes of the British Public to Business Ethics: 2017

The 2017 results of the IBE's annual survey of the attitudes of the British public to business ethics

12 December 2017

Publication type: Board briefing

Fair or Unfair: getting to grips with executive pay

This Board Briefing offers both practical advice on how remuneration committees can address the challenge and some pointers to possible reform centered around the need to be clear about the value of what is being awarded and the pace at which remuneration is earned. Fairness and simplicity are the two themes which run through this publication.

10 February 2016

Publication type: Research report

Fairness in the workplace: Staffing and employment contracts

This IBE Briefing considers ethical issues related to staffing arrangements and employment contracts. Specifically, it looks at the potential ethical implications of the ‘casualisation’ of the workplace, including zero hours, agency contracts, part-time workers and transfers under TUPE.

30 April 2015

Publication type: Research report

Fairness in the Workplace: Pay

This Briefing looks at how fairness can be achieved in the specific areas of executive remuneration and paying a living wage. It also briefly addresses some additional pay issues, and provides examples of ways in which some companies are addressing the issue of fairness in pay.

02 July 2014

Publication type: Business ethics briefing

Supply Chain and Payment Practices

This briefing explores the three issues involving supplier payments. It then looks at governmental attempts to curb the problems and how companies are addressing the issue.

06 November 2013

Publication type: Research report

Incentivising Ethical Behaviour in Staff

This Briefing analyses the different ways of incentivising ethical behaviour, using ‘carrots’ or ‘sticks’. It outlines 6 attributes of an effective incentives scheme.

11 September 2009