Tackling discrimination means obvious economic rewards for individuals by closing the pay gap and blatant benefits for employers in helping to fill obvious skills shortage across the UK economy
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The Women and Work Commission (WWC) has made clear the economic rewards of closing the pay gap, namely, that we cannot afford to ignore a potential benefit of £23bn a year. But there are clear rewards for employers too. Enabling women to make the most of their talents will allow employers to recruit from a wider pool of talent. Opening up traditionally male or female jobs to both sexes will help to fill skills shortages across the UK economy. The government, employers, unions and the Equal Opportunities Commission (EOC) each have a key role to play in taking forward the recommendations of the WWC, and we can all gain from closing the pay gap.
The WWC’s report supports the EOC’s long-held view that there are three causes of the pay gap – and a number of solutions are needed to close it. Discrimination has long been recognised as a cause of unequal pay, but the impact of gender segregation in the workplace, where women are concentrated in low-paid jobs, and the lack of senior part-time and flexible working opportunities for female staff are equally crucial.
The creation of the pay gap starts at school, where poor quality careers advice too often channels girls into poorly-paid work, without them making an informed choice about the kind of career they want. Employers bear the brunt of this stereotyping, which leads to a gender-segregated workforce and chronic skills shortages. For example, the construction industry, which needs an additional 350,000 workers just to fulfil existing contracts, is 98% male. A skills crisis is also damaging the female-dominated caring sector. In March 2005, the EOC called for a national strategy from government to tackle gender stereotyping, a recommendation backed by the WWC. We have been working with the government over the last year to help develop this.
The difficulty of combining work with caring and parenting responsibilities can have a devastating effect on women’s earnings, particularly those who work part time. Although the UK has one of the highest economic participation rates for mothers with young children, many work below their potential in low-paid part-time work. The pay gap between part-time women and full-time men currently stands at 38% and has barely shifted in 30 years. Both the EOC and WWC believe the solution is to increase the number of senior level part-time and flexible roles. We hope expanding the right to request flexible working will eventually lead to flexibility becoming the workplace norm, rather than a right enjoyed only by new parents and an option offered only by forward-thinking employers.
There is a strong focus throughout the WWC report on the work employers can do to close the pay gap. The forthcoming gender equality duty will have a huge impact on employers in the public sector by ensuring action is taken on all causes of the pay gap, while the recommendation for public contractors to promote gender equality will also have an impact on private sector employers because of its impact on procurement.
The Women and Work Commission was unable to reach a consensus on whether mandatory equal pay reviews should be introduced. Our own research has shown that the current approach is not working: just one-third of large organisations have completed an equal pay review. Getting employers to check their pay and employment practices is crucial to closing the pay gap. The government’s Discrimination Law Review offers us a once-in-a-lifetime opportunity to look afresh at Britain’s equality laws. We think that it is time for a more flexible, proportionate and targeted approach to tackling all three causes of equal pay, which places a responsibility on employers to take action, but in return offers them an amnesty period from equal pay claims while they put things right. We will be working with employers to develop this approach, along with user-friendly self-diagnostic tools.