Measures to tackle the gender pay gap

CIPD Ireland contributed to the Department of Justice and Equality’s consultation on measures to tackle the gender pay gap

We presented views on a number of areas:

  • the factors creating the gender pay gap (GPG); 
  • the actions that need to be taken; and
  • how CIPD can contribute to implementing these actions though engagement with members, consultation forums and research, promoting good practice and supports as well as drawing on CIPD international expertise.

What is the gender pay gap?

The gender pay gap is the difference between men’s and women’s pay, based on the average difference in gross hourly earnings of all employees, usually taken at a national level.  According to the EU, the gender pay gap in Ireland was 13.9% in 2014 compared with an EU28 figure of 16.7%. A positive gender pay gap indicates that, on average across the employed population, women are in a less favourable position. It is different from equal pay, where male and females are legally entitled to equal pay for equal work in specific jobs.

CIPD believes that an increase in visibility of the benefits of closing the gender pay gap would help to generate more positive business attitudes to tackling the GPG. Guidance by the CIPD on Gender Pay Gap reporting (2017) identified that the under-utilisation of women’s skills costs the UK economy up to 2% of GDP annually, and we recommend that the Dept. commission an analysis of the Irish situation.

At an organisational level, the benefits of closing the gender pay gap translate into higher business earnings and improved growth; the ability to attract and retain the best people; the promotion of gender equality; the opportunity to enhance public perceptions. Diversity of leadership and decision-making also has a positive impact on organisational performance.

As women make up 50% of the talent pool, attracting and retaining them is central to future success. Women are better qualified than ever before. With women continuing to outperform men educationally, the case for taking action to ensure their skills are fully utilised and rewarded is incontestable.

Here is a summary of CIPD recommendations. (Read the submission below for full details)

1. Government awareness and information

  • Implement a promotion campaign to raise awareness about the reasons why addressing the gender pay gap makes good business sense and the good practice that can be adopted to put things right. 
  • Tools to help analyse and assess pay inequalities need to be made much more accessible and user friendly than currently. Standardised methodologies and tools need to be developed to provide support to employers to understand their GPG, and the kind of practical measures they can take to close it.
  • Address gender stereotypes that, from the youngest age, limit women’s and girls’ educational and occupational opportunities. The promotion of male, as well as female role models across the business community who can show action on GPG needs to be a strong strand of action.

2.    Sectoral implications
  • EU research on the specific sectors clearly indicate that there are very different patterns leading to gender pay gaps in different sectors. A sectoral evaluation of the GPG in Ireland as it is currently impacting on female labour market participation and pay rates is urgently required.  Then sector- specific initiatives, in addition to general programmes, can be targeted at sectoral labour market participation and pay rates to drive action and change.

3.    Talent management and inclusion
  • In order to leverage the benefits of gender diversity, companies need to take a holistic approach, starting at the top, and promoting a diversity of leadership styles. Actively managing talent rather than passive commitment has been shown to lead to better returns. This can involve having more males in traditional female careers, as well as vice versa. Determine who is responsible to address the GPG and ensure it is translated into accountabilities and KPIs for senior roles. 
  • Gender balance in business and public sector leadership need urgent attention. For example, the current situation where 60% of the civil service are female but only 29% of the senior public servants are female is unsatisfactory and immediate actions and targets should be agreed. 
  • Support transparency in pay and compensation. This is not an easy win where there are forces to blur pay levels and gender differences. Organisations can publish the parameters for setting pay levels, the criteria and formula used to determine pay and merit increases and bonuses.
  • Government strategies such as the National Women’s strategy put emphasis on compliance.  The focus in organisations needs to move from more than a compliance agenda to one of equality and inclusion. The language and direction of inclusion means valuing and trusting each employee as an individual. Organisations can set explicit diversity goals in recruiting and at all levels and can implement policies encouraging flexible employment, parental leave, mentoring and leadership training.

4    Auditing and Reporting

  • Encourage employers to implement a proper valid pay audit to determine the extent of the gender pay gap and where it exists in the organisation in term of roles, levels, skills, etc. 
  • Set up a Government expert working party to guide the development of an online gender pay gap assessment tool based on common definitions and formulae, ensuring all aspects of pay and activity are represented. 
  • Set a target and produce guidance for companies to voluntarily report, in the first instance, on the gender pay gap as part of their annual reporting process, and ensure this is reproduced on a company’s website. Supports should cover how to evaluate and report on an organisation’s pay gap, help employers to understand the basis of their gender pay gap and the practical measures they can take to close it. 
  • While gender pay gap reporting can be onerous especially for small organisations, CIPD recommends that it be piloted in the public sector.

5    Tackling organisational barriers to change
  • World Economic Forum research to close the gender gap (wider than the GPG) identified that, at organisational level, across all industries, unconscious bias among managers and lack of work-life balance were cited as the two top barriers to women’s workforce integration. In well-established, older organizations, workplace structures that were designed for a past era still, often unwittingly, favour men. Additionally, women had relatively fewer role models to look to and women were less likely to want a top job. 
  • As work changes it is especially important that women are well represented in emerging and new skills, and there is an opportunity to reduce the GPG if we minimise the gender disparities and undervaluing of new work.
  • Companies can also offer skill-building programs linked to subsequent job placement and employment opportunities, thereby creating job opportunities for women and simultaneously securing their own access to new skilled labour pools. 

6    Women’s pension gap

  • The GPG debate needs to have a more solid focus on pensions and the risk of poverty in retirement that faces more women than men. 
  • A working party of stakeholders is needed immediately to analyse the impact of the GPG on women’s retirement income and recommend the paths to move forward to a new, more sustainable pension’s regime.
  • Processes are required to future-proof pension provision to ensure that it does not inadvertently effect those who may have be out of the workforce, as is currently happening and takes account of the lower pension coverage by women, and their lower wages.

7    Parenting, caring  and flexibility
  • The gaps in accessing affordable quality childcare and elder care is a hindrance to enabling women, generally the main carers in society, to remain in or re-join the labour force, and must be urgently addressed. 
  • There needs to be more active promotion of flexible working by employers. The Government also needs to assess to see how the regulations around access to part-time and flexible working can be made more responsive to the needs of employees, parents and people with caring responsibilities. 
  • The Department should examine more flexible working arrangements for employees in general, and recognise the extent to which a lack of entitlement to part-time working restricts new mothers access to employment and returning to work. It would also look at how lack of senior men and women working part-time restricts the options for more junior / lower-paid females and is likely to exacerbate the feminisation of junior roles.
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