Rita Trehan: How the gender pay gap harms engagement and productivity


In spite of the dedication and work of many, the majority of medium-sized and large organisations pay higher wage rates to men than women. That was the conclusion drawn from  The Gender Pay Gap briefing paper, published by the House of Commons in April 2018, which found that at 78% of firms, including at some of the UK’s most respected organisations, there exists a gender disparity in pay.

The reasons for promoting and supporting women in business go far beyond fairness. Female leaders hire more women, female representation improves equality across the board and greater gender equality leads to job creation and higher gross domestic product (GDP). A wealth of data from the Kellogg School, the World Economic Forum and the European Institute for Gender Equality, among others, supports this.

But making pay more equal also has a more immediate effect in employee engagement and productivity. Research collated by The PNC Financial Services Group, published in 2017, shows that female employees, especially senior employees, highly value appreciation for their work and those that are less engaged cite a lack of this appreciation as a major reason why. Pay is, of course, not entirely reflective of appreciation, but it does play a part; if women do not feel they are being paid as much as their male counterparts, it follows that their engagement will go down.

Organisations with highly engaged employees also have an average three-year revenue growth 2.3 times greater than organisations whose employees were only engaged at an average level, according to the Focusing on employee engagement: how to measure it and improve it report published by UNC Kenanflager Business School in 2011. Gallup’s 2013 State of the global workplace research referenced by Business 2 Community backs this up; it found that organisations with engaged employees outperformed those without by 202%. More directly, the annual Global Gender Gap Index, which was developed by the World Economic Forum in 2006 and was most recently published in November 2017, has repeatedly found a correlation, if not necessarily a causation, between the empowerment of women in business and high productivity.

The evidence for closing the gender pay gap is now irrefutable. It is a demoralising fact that progress in this area has been slow and, in some cases, stopped completely. When it is remembered that technology is expected to widen the gender pay gap and hit women hardest, it is absolutely paramount that anyone who cares about injustice continues to beat the drum for a fairer, more productive, more successful business world.

Rita Trehan is chief people officer at Australian energy organisation AGL Energy