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15 July 2019
We need to talk about the gender pay gap
Erica Kinmond, an Associate at law firm Pinsent Masons, recently wrote a piece in Energy Voice about addressing the gender pay gap in the energy sector. Many businesses in the sector attribute their gender pay gap on recruitment challenges, i.e. a shortage of women being recruited into the sector, particularly for roles in STEM fields. But as Kinmond points out, this cannot be solely to blame as companies across the sector have gender pay gaps ranging from 5 – 50 per cent.
That means that simply expanding the pipeline of women into the sector will not itself render pay equality.
Internal factors matter too: Organizations must take it upon themselves to address their working policies, operations and market approaches to understand how to address a pay gap. This work must be undertaken with a view to short-term, medium-term and long-term scenarios, taking into account current and projected talent pools.
Notably the pay gap worsens after women switch to part-time work, a step often taken after childbirth. According to the Institute for Fiscal Studies, “a graduate who has worked full-time for seven years before having a child would, on average, see her hourly wage rise by a further 6% (over and above general wage inflation) as a result of continuing in full-time work for another year, but would see none of that wage progression if she switched to part-time work instead.” Minimizing this “motherhood penalty” through more inclusive flexible working and caretaking policies is imperative to achieve high talent retention and productivity rates.
What to do?
The UK, which has recently made gender-disaggregated compensation reporting mandatory for companies with 250 and more employees (with all data made publicly available), has published a brief guideline for organizations undertaking such an assessment.
Harvard Business Review has also published a few do’s and don’t’s when it comes to companies fixing a gender pay gap, looking at which policies succeed and which ones create more problems.
If you have any other helpful resources on gender pay gap solutions, please let us know at [email protected].
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