mind the gap

Gender Pay Gap v Equal Pay – The Difference and Why

With the forthcoming Economy, Jobs and Fair Work Committee’s current inquiry into the Gender Pay Gap in Scotland I thought it would be helpful to outline the distinctions between equal pay and the gender pay gap. Many think we don’t have a pay gap in our economy due to equal pay legislation.

Equal Pay and the Gender Pay Gap are two completely separate issues.

Equal Pay is covered by the Equality Act of 2010 which means that men and women in the same employment performing equal work must receive equal pay.

The Gender Pay Gap is the difference between men and women’s average earnings in a business or across the labour market. The Pay Gap is expressed as a percentage of men’s earnings.

The Gender Pay Gap exists for a whole host of reasons.

Women are still more likely to work in part-time and low paid roles compared to men. In Scotland, women account for 76% of all part-time workers.

The average gender pay gap across the UK is 18% however in some sectors it is much higher including financial services where it is estimated to be as high as 39%. Simplistically we can say that is because in this sector there is likely to be more men in higher paid roles than women.

The Gender Pay Gap isn’t unique to Scotland or the UK. Global estimates suggest that it could take another 140 years for the gap to close at a global level.

So in Scotland – how do we tackle the gap that remains? This is complex and there is no one correct answer but taking a detailed and evidenced based approach to understanding the facts is a start.

If we know what the gap is key industry sectors in Scotland we can start to look at how we use the tools available to us to close it. These include encouraging more girls into Science and Technology at a younger age and maintaining this interest beyond school to lead to career opportunities. For women in employment, how do we support more women to move from part-time to full-time work? How do we look at developing more women in work into senior leadership roles? How do we reward success in our companies? Are promotions solely based on presenteeism, finding someone in the boss’s own image or through closed networks?

This is a massive challenge but also a huge opportunity for Scotland’s economy. More women working and earning means more economic growth – inclusive economic growth.

We all have a part to play and the Economy, Jobs and Fair Work Committee’s inquiry is an important step in the journey.

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Women Consumer Power

Candace Bushnell, the “Sex and the City” author, famously once said “Women with money and women in power are two uncomfortable ideas in our society”. But the fact is that the economic power of women as earners, consumers, purchasers and influencers has been growing steadily for decades.

Whilst the media is dominated by issues linked to pay gaps, board membership, career progression and the many obstacles faced
by women, and it is right that we focus on the inequalities and social injustice that still exist for many women today, what is often forgotten is the scale and the extent of the economic power and influence that women have.

Women currently control $20 trillion or 27% of the world’s wealth. In the UK 46% of the 376,000 millionaires are female and 18 women are now in the exclusive billionaires’ club (2016). And this figure is expected to grow as more women enter these power indexes, no longer claiming their position due to family inheritance or divorce settlements.

More women are graduating with degrees, and more women are entering the workforce. Not only are women earning more as they scale professorial and corporate ladders, but they are also setting up businesses at a faster rate than men. One third of businesses in the world are owned by women. In Scotland, over 80,000 businesses are owned by women contributing over £5 billion to the Scottish economy each year, that’s a lot of female buying and influencing power.

Women now represent the largest market opportunity in the world and female consumer purchasing power exceeds the GDP of India and China combined (Forbes 2013). Women are fast becoming “prominent creators of wealth” and it is expected women will control 75% of all household spending by 2028.

The influence of women on the consumer economy is huge, leading many commentators to suggest that if consumer spending had a gender it would be female. Leading gender analysts Catalyst.Org, estimates that, on average, 67% of all UK Household consumption is controlled or influenced by women. And it is much greater in many key household areas.

Women make the decision or influence the purchase of 92% of holidays, 65% of cars, 93% of food, 91% of homes and 61% of PCs and with the extensive and growing use of social networks such as Facebook and sharing of social reviews by women, social media is now playing an increasingly important role in the decision-making process of many women.

In response to this “gender flip” or changing economic dynamic, most consumer businesses and advertising specialists have become much smarter in terms of how they “sell” to women.

Yet this consumer industry experience is not reflected in the response by many other companies to increasing female economic power. However, many organisations do understand that learning from the consumer industry could be vital for them as they look to sell to the growing number of senior female business decision makers, create greater gender diversity in their organisation or recruit and retain more women in their workforce.

Deloitte, a global accounting and consultancy practice, has recognised that the first step to achieving greater diversity within their business is to focus on their clients or customers who are increasingly female decision makers – where a “one size fits all” marketing or sales approach no longer works.

They have effectively transformed their internal HR diversity training into a key business tool, successfully winning more contracts and pitches and at the same time raising levels of awareness of the benefits of gender diversity within their own organisation.

Similarly, many recruitment companies are understanding the impact of language and job advertisements on success rates. #WordsthatWork, an Australian Government initiative has recognised, as in consumer messaging, business words are powerful.

When it comes to recruitment, words can encourage or discourage women from applying for jobs, they can help reduce unconscious bias and provide a broader candidate field. Research suggests that women are less likely to apply for male sounding roles, described as “assertive” or “determined” and similarly for software companies, substituting the word “developer” for “hacker” increases the number of female applicants.

With 71% of social media users’ women and 78% of women using the internet for product information, social marketing is also becoming an increasingly important tool and channel to influence decisions and to engage women on a range of business and work related issues. Studies show that messages on users’ Facebook feeds can significantly influence voter patterns and social media played a key role in influencing decisions in the recent US Presidential elections.

The convergence of the consumer and business world is driving change in our homes, workplaces, communities and society.

More women with more money and more power is something we all need to get used to, uncomfortable or not.

Dr Lesley Sawers

Executive Chair

GenAnalytics Ltd

This article first appeared in Business Women Scotland Magazine February 2017

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The Importance of Engaging Men on Gender Equality in Scotland

Men have a critical role to play across Scotland as we continue to work to achieve equality and diversity in our workplaces. However, in many workplaces, men remain an untapped resource in many gender initiatives and their views are not sought or widely known.

To address this information gap, GenAnalytics is launching the first ever male attitudes survey on gender equality in Scotland. We are asking men at all levels and across all sectors of our economy to give ten minutes of their time to share their views via our short online survey.

By having a more detailed understanding of what men think about gender equality and programmes within their own organisation we can use this information to develop a more balanced picture of gender issues across workplaces in Scotland.

You can access the survey here. Male Attitudes Survey

We would also be grateful if you could circulate the survey to any other male colleagues or friends who would also be willing to share their views.

All responses are anonymous and the survey should take no longer than 10 minutes to complete.

By working together and understanding all views and opinions we can achieve gender equality in the workforce and benefit our economy.

Thank You.

GenAnalytics Ltd