Business must address the gender pay gap now

The Chartered Management Institute has found that it is wider than was previously thought, and nearly half a century after the Equal Pay Act, there are no acceptable excuses for that

Ann Francke of the CMI warns of a glass pyramid restricting female employees (Rex)

There are some things that are just out and out wrong and that there can be no acceptable excuses for.

The depressingly widespread practice of paying women less than men for the same roles is one of them.

On Monday, The Independent reported on a study by the Chartered Management Institute and XpertHR that looked at salaries across 432 organisations.

It reveals that men in senior management positions earn an average £11,606 more than their female peers and that the pay gap between them is a yawning 26.8 per cent when bonuses, perks, such as car allowances, and commissions are taking into account.

That is important because its previous analysis focussed only on managers’ basic salaries. It put the gap at a lower (but still far too high) figure of 23.1 per cent or £8,964.

Even under that old methodology, the picture painted by the research is anything but pretty. This year’s figure is 23.6 per cent or £9,326, indicating that the gap is widening.

It probably won’t surprise anyone to learn that the higher up the ladder you go, the wider the gap gets. At director level, for example, it stands at £34,144.

New government regulations require companies with more than 250 employees to publicly disclose their gender pay gap by April 2018.

So far just 77 of 7,850 eligible employers have come up with the relevant data. Now we know why.

While the backsliders might be able to put off a reckoning, however, it is still coming, and will doubtless make for illuminating reading when it does.

Will naming and shaming the worst of the worst have an impact? Will the embarrassment that will be caused to business leaders when the level of the discrimination they indulge in becomes known be sufficient to turn the tide?

It would be nice to think so. But despite the legislation and reforms that have been introduced over the years, starting with the Equal Pay Act of 1970, the gender pay gap has proved harder to eradicate than small pox.

By the way, part of the reason for that Act being ushered in was to bring the UK into line with the Treaty of Rome, another example of Europe saving the UK from its regressive self.

Ann Francke, chief executive of the CMI, is clearly frustrated, and no wonder. “Too many businesses are like ‘glass pyramids’ with women holding the majority of lower-paid junior roles and far fewer reaching the top,” she says. “We now see those extra perks of senior management roles are creating a gender pay gap wider than previously understood. The picture is worst at the top, with male CEOs cashing-in bonuses six times larger than female counterparts.”

Indeed so. There are those, largely on the antediluvian right that claims itself to be pro business, that will at this point seek to trot out excuses, each more knuckle headed and ridiculous than the last. The best way to respond is to pat them on the head and pack them off to somewhere in the countryside where broadband is yet to penetrate and they still think the metric system is an example of dangerous radicalism. Their views are worthy only of contempt.

The glass pyramid Ms Francke refers to needs to be smashed on the grounds of economic justice, not to mention common sense.

What the rest of us, those of us living in the 21st century, now need to do is enter a discussion about how to do that. The pay reporting requirement represents a step in the right direction. Some businesses will recognise that they have work to do, and will act to address the issue.

There is a clear benefit to their doing so. Not only will they be held up as an exemplar of best practice if their pay gap declines (PR win) they might very well find that bright, talented women beat a path to their doors (business win).

However, there are others who will shrug their shoulders and do nothing. They might not even blush. They need poking with a bigger stick, and perhaps a legal one.