CBI: Next government should focus on closing gender pay gap


The Confederation of British Industry, the UK’s leading business group, has called for the next government to set a national target in order to reduce the UK’s gender pay gap.

The organisation believes prioritising the issue could have similar positive effects as the Lord Davies initiative has had on the number of women on FTSE boards.

“Gender should not define what people earn and we need to put equal pay firmly into the spotlight. Currently, too many areas of work – often those with high pay potential – are seen as male-dominated, with women steered away from options that would give them better access to higher pay and seniority,” said Katja Hall, CBI Deputy Director-General.

According to the Office for National Statistics, the gender pay gap currently stands at 15.7 per cent, and has been rising steadily over the past three years. The wage disparity between men and women in their twenties has doubled since 2010. Women with all levels of qualification are affected, with those on middle incomes being most undervalued in comparison to their male colleagues. A survey conducted by PricewaterhouseCoopers found that the UK’s gender pay gap is about four per cent above the EU average, and their report concluded that the UK still lags behind many countries when it comes to female economic empowerment.

Hall and her colleagues believe that ensuring a national target for closing the gender pay gap would bring awareness to the issue as well as enabling better monitoring of any progress gained. It would also force improvements to be made in the areas which have a real impact on equal pay, such as improved careers guidance in schools, an increased understanding of the benefits of flexible working for parents and businesses, and affordable childcare.

The CBI has outlined its position on diversity in the workplace in a new publication, “Building on Progress.” Included in the paper are recommendations for both industry and government aimed at boosting gender equality. These include ways of creating openness towards job-sharing in senior roles, re-integrating maternity returners and adapting recruitment processes. In addition, the CBI urges the government to consider funding a system supporting employer engagement in careers services, and advises that educational institutions should set targets for girls’ participation in key subjects, such as physics. These guidelines focus on helping women enter into and remain within highly paid professions, where they currently face significant obstacles. A separate but important contributor to the disparity in pay is society’s undervaluing of traditionally female labour areas, such as the caring and teaching professions, a factor not in the scope of the CBI's paper.

Hall and her colleagues envisage their suggested national targets to be set by a committee chaired by a business figure, with companies being encouraged to meet these targets on a voluntary basis. The CBI do not advocate mandatory measures for businesses, such as demanding that firms report on their payroll statistics, as they believe such rules don’t fit with the current need to work towards sustainable growth. Their imagined set-up mirrors that of the Lord Davies review, an initiative started in 2011 aiming for 25 per cent of board members to be women by 2015; thereby doubling the level of female representation in top-level business. Currently, over a fifth of all FTSE 100 board posts are held by women, and according to the latest annual report of the review, these increased rates provide “clear evidence the voluntary approach is being grasped by British business, and is working.”

Compulsory gender pay audits were abandoned by the coalition government and replaced by the voluntary scheme “Think, Act, Report” in 2011. As of November 2013, only 137 companies had signed up to the initiative. This week, a petition launched by Grazia calls for the government to enforce a section of the 2010 Equality Act which would obligate companies with more than 250 members of staff to publish the details of hourly pay of men and women. This transparency would mean women would be able to see whether they are being paid less than their male colleagues in comparable roles. The appeal comes exactly 46 years after the protests at the Ford Motor Company plant at Dagenham, which prompted the original Equal Pay Act.

Gloria De Piero, Shadow Minister for Equality and Women, is backing the campaign. “We can’t wait another 44 years for change. Women deserve equal treatment and equal pay.”

Katja Hall spoke about gender equality at work at Thursday evening's First Women Awards, an awards programme focused on senior-level business women and professionals