So, how do gender pay gaps happen?
Gender pay gaps can occur for many reasons and at multiple points, including when employees start at a new company and during appraisals and/or pay reviews.
Harvard Senior Lecturer Hannah Riley Bowles points to research that shows men are more prepared than women to negotiate salaries, creating wage inequalities with existing employees, meaning some people progress slower up the salary chain.
When women do negotiate their salaries, they often feel punished for just asking. Research has shown that women are treated differently to men as a result of negotiating their pay, including colleagues being less willing to work with them after the negotiation.
Women can also feel (often with good reason!) they’re being punished for taking time out of the business so are overlooked for promotions and pay rises. A recent campaign, Pregnant Then Screwed, encouraged women to share stories of pregnancy or maternity discrimination they’d witnessed and there’s evidence that this fear of reprisals is also preventing men from taking paternity leave.
Pay gaps persist and even widen as women become more senior in the business and as they get older. According to the Office of National Statistics, women’s pay grows less than men’s and also stops growing earlier than men’s pay. This applies to both the private and public sectors.
Many of these behaviours come down to unconscious bias: the automatic, mental shortcuts used to process information and make decisions quickly. When we lack diversity, we lack consideration of different viewpoints, motivations and outcomes of decision-making.
But the problem isn’t just a human one.
Even before starting with a company, women are at a disadvantage. The algorithms used by some job boards may be sexist and/or racist because of existing systemic inequalities, caused by the lack of diversity of the people developing those systems. Some women and other under-represented groups may not be seeing adverts at all and the situation could get worse unless more women are involved in developing and teaching AI, argues Hannah Kuchler in the Financial Times.
We welcome extending the gender pay gap reporting requirement to medium businesses and as a small business (under 50 employees), we were curious to apply the same methodology to our own organisation, to see how we fared.