Before embarking on the gender pay gap journey, we must first understand the difference between equal pay and the gender pay gap. Equal pay regards the pay males and females receive in the same or similar job roles, while the gender pay gap focuses on the difference in pay for males and females across all boards, which is presented as a mean and a median.
The median is calculated by ranking the pay of all males in the business and all females in the business from lowest to highest and finding the middle-paid colleagues. The median pay gap would then be the difference between male and female median pay. On the other hand, the mean is calculated by comparing the average pay for all men and all women across an organisation. While men and women may hold different job roles across the board, significant differences in the mean pay can also highlight the issue of men dominating more senior roles; Sainsburys wrote in their report:
"We, like many organisations, have more men than women at the most senior levels of our organisation and more women than men in hourly paid roles. This means we have more men earning higher salaries than women, which has a significant impact on both our gender pay and bonus gaps… this difference in representation at senior levels of our organisation is something we are determined to address."
Here are 3 reasons why acknowledging and then closing the gender pay gap will benefit your business:
- Seeing where the gender pay gaps in your business lie and addressing them will make for a more trustful and happier workforce, in turn improving customer satisfaction Women being underrepresented in senior roles can mean women working in customer-facing positions do not have a female role model to look to in the workplace. Everybody needs someone to aspire to, and having no female role model can lead to stifled ambition in female employees.
- Your business will have a better representation as ethical and fair, which will attract a much wider pool of talent to help your business grow According to research by Global Tolerance, 62% of millenials want to work for a company that makes a positive impact and employs values and ethics into their business model. Publicly having gender pay gaps in your business could mean cutting yourself off from almost two thirds of young talent.
- More women working more hours and earning more money can only be good for the economy, and a good economy is good for business Home secretary Amber Rudd, minister for women and equalities, said “research shows that improving women’s participation in the labour market could add £150 billion to the economy by 2025… closing the gender pay gap makes economic sense.”