20th November 2024 marks Equal Pay Day, a national campaign led by the Fawcett Society, the UK’s leading membership charity campaigning for gender equality and women’s rights at work.
What is Equal Pay Day?
Equal Pay Day marks the day in the year when – based on the gender pay gap – women in the UK effectively stop being paid.
To calculate the gender pay gap, and Equal Pay Day, Fawcett uses the UK’s mean, full-time, hourly gender pay gap. According to their sums, the gap between the average pay of men and women has widened this year for the first time since 2013, up to 11.3% from 10.4% in 2023.
What does the day mean in real terms?
It means that the average woman in the UK stops being paid on 20 November for doing work of a comparable value to the average man, who gets paid up until the end of the year.
Essentially, women work for an extra five weeks in the year to earn the same as their male counterparts.
Context and legislation
According to the World Economic Forum (WEF)’s 2024 Global Gender Gap report the UK’s gender pay gap ranking is up one place from 15th to 14th out of the 146 countries, having placed 22nd in 2022. Iceland, Finland, Norway, New Zealand and Sweden top the table with the smallest gender pay gaps.
Legislation passed in the UK may account for the move up that table. The Equality Act 2010 required employers to pay men and women doing a similar job the same amount of money. Additionally, seven years ago gender pay gap reporting was made mandatory in the UK.
But in the grand scheme of things, these changes seem small.
Distribution of roles – a societal issue
The overall difference in average earnings between all men and all women comes down to the distribution of roles. In simple terms, there are more men at the top and more women at the bottom – an imbalance that sits at the root of most pay gaps and points to some broad, inescapable societal issues driving the equity gap.
Before the age of 40. the gender pay gap is negligible in the UK. After that the ‘motherhood penalty’ kicks in and creates an issue at both ends of the workplace. At the top, we lose our female leaders and at the bottom a larger distribution of women is concentrated in part-time, lower-paid roles.
In tandem, women still shoulder the burden of unpaid work and family care, which leads to them working in part-time roles and in positions less likely to be well paid or to offer progression.
Driving change on a macro level
Given these deeply embedded issues, how can UK employers and wider society drive the change already achieved in Scandinavian countries? Let’s first look at macro-level changes…
Gender Parity Accelerators
This year the WEF pushed its forecast for closing the gender pay gap out from 131 years to 134. It is a sobering thought. To make the kind of changes we need, the WEF coined the phrase Gender Parity Accelerators (GPA) to describe big policy decisions devised and implemented at a macro, national level.
There are currently 14 GPAs in action. Iceland’s radical new policies on shared parental leave and accessible childcare have had a profound impact on gender equality and they are at the top of the Gender Parity list. Costa Rica’s national care policy around pre-school children has also had a great impact in a vastly different continent.
Improving gender pay reporting
There are still glaring anomalies in how gender pay data is recorded and processed, most obviously in the number of employees needed before companies are forced to comply.
Getting more granular, data is collected on pay after and not before salary sacrifice which can be misleading. What’s more, company partners’ salaries (male-dominated) are excluded from reporting and data around part-time and full-time workers’ bonuses are not treated the same, which further clouds the picture.
We need to choose change and push impatiently for fundamental shifts.
Driving change on a local level
How can individual organisations play a part in closing the gender pay gap? Here are three ideas…
Create your own gender parity accelerators
Consider creating your organisation’s own parity accelerators around job design, recruitment, leave policy and job sharing.
For example, enhanced maternity leave can empower women to focus with greater confidence on motherhood, while better paternity leave can empower fathers to take on more of the childcare. Additionally, investing in on-site childcare provision can increase staff retention and foster community spirit.
Job levelling and evaluation – embracing technology
Pay secrecy allows gaps to flourish. Invest in job levelling or job evaluation to allow your managers and HR team to evaluate roles and slot them into levels demonstrating equal value in a robust, consistent way.
Plugging this data into a Fair Pay Dashboard can allow you to track new recruits over time, for example comparing the relative journeys of a man and a woman starting in the same role on the same day.
Equal Pay Audits – placing policies and practices under constant review
To drive parity and fairness, it’s important to constantly review your HR policies and procedures to ensure that systems are in place to question whether pay for men and women is fair.
Consider the following:
- Are starting salaries for role X the same for men and women?
- How are your promotions and pay increases happening and when in the pay cycle?
- Do you have a proportionate percentage of men and women being promoted?
- Do men and women progress through your organisation at a similar rate?
- Is sound logic applied to pay rises where negotiation is happening, or where experience and flight risks are considered?
Let’s make Equal Pay Day a thing of the past
As HR and business leaders, we need to choose change and push impatiently for fundamental shifts in two key areas. First, on a societal level, we need new policies that enable men and women to share more non-paid caring duties. Second, on a business level, leaders need to shape policies that enable greater flexibility around working hours, parental leave, training and development. This will in turn help create and retain a pipeline of female leaders
And, maybe then, Equal Pay Day will move closer to the end of the year.
