Want to fix the gender pay gap? Pay women more
The ONS‘ latest report reveals that the gender pay gap has decreased, albeit it at a glacially slow pace. While many commentators are hailing the results as a monumental shift in the balance for fair pay, Dr Nahla Khaddage Bou-Diab says that corporate initiatives backed by many of the City’s big players are slowing down progress
The latest ONS report reveals that gender pay gap has narrowed among full-time employees, decreasing from 7.5 per in April 2023 to 7 per cent in April 2024. While I welcome this news, at the current rate, it could take 16 years to close the gap.
It’s a deep-seated issue. And the problems causing the pay gap are quite nuanced. Not only are there more men in senior roles than women, but at a wider societal level, caring responsibilities and part-time roles are shared unequally.
So, while there isn’t a magic lever we can pull to fix the pay gap – to me, the gap is being kept open by the prevailing wisdom of what equity looks like across the corporate world.
This is evidently clear in McKinsey’s latest Women in the Workplace report. I recognise that the study has been conducted in the United States, but given the multinational presence of some of the planets biggest corporations, their company culture and values are often replicated in every territory they operate in. And in the City of London, big corporates are setting the tone for the rest of the UK business ecosystem.
The report outlines that representation of women in workplaces has improved, but we still have a long way to go. I commend the authors’ contributions to giving light to the difficulties faced by women in pursuing their career path, but the solutions it poses for fixing inequality in the workplace are actually reinforcing the problems that are causing women to have lower salaries than men.
The report points to several best practices that top companies have adopted to improve equity and inclusion in the workplace. There are a myriad suggestions, like introducing metrics to track promotion rates of women and allyship training, as well as employee benefits like menopause support and fertility treatment.
I think these measures, although well-intentioned, set the precedent that employers can satisfy DE&I initiatives by introducing metrics. And every time you introduce a metric, you’re creating another barrier for employees to confront. Crucially, they reduce women down to numbers, so that corporates aren’t confronted with the need to treat them equally in the first place and pay them a higher salary.
Then there’s the perks that are specific to issues that women confront, like going through the menopause and fertility treatment. Again, this gives the employer the opportunity to spoon-feed women perks instead of paying them fairly in the first place, which would allow them to choose to buy fertility treatment on their own terms.
When you’re positioning women as a group within your organisation that requires more flexibility and care, you’re perpetuating the stereotype that they are high maintenance. You’re continuing to reinforce the idea that women need special treatment.
Women are already as powerful as their male counterparts. In fact, they’re a critical factor for success in modern businesses. I want to see firms get creative about how they attract women ahead of the next Women in the Workplace Report – and not because it’s their social responsibility to do so, but because they add genuine value.
Corporate initiatives aimed solely at women shouldn’t be hailed as best practices. At best, they are ‘sticking plaster’ equality initiatives – and they’re being adopted by multinational corporations and startups throughout the Square Mile.
Paying women a fair salary in the first place will mitigate future requirements for initiatives and perks, and importantly, bring us much closer to closing the gender pay gap in the corporate world.
Dr Nahla Khaddage Bou-Diab is chairman and general manager of Oneness Mgmt, and CEO of AM Bank. She is also a published author of several books, including Untamable and A Leadership Shift, which was published on 28 March.