“ To truly make a difference, employers must look beyond their pay gaps... to widen the pools from which they recruit and take steps to reduce unconscious bias in processes. Most important of all is creating a genuinely inclusive workforce that allows people to be themselves and thrive both in and outside of work.” MICHELLE SEQUEIRA, MERCER UK
Leader, Mercer UK. “Key drivers of pay gaps range from issues with attracting and retaining women, to failing to eliminate the barriers to career progression that prevent female and diverse employees from entering more senior roles.” Fewer than one in three (30%)
employers were able to reduce their gender pay by 2% between 2019 and 2020. Mercer also found that 18% of employees reported an increased pay gap from 2019 to 2020. The latest FTSE Women Leaders
Review, published in February, details female representation at board level in the UK’s largest 350 companies and shines further light on this issue. Behind the headline figure of women holding 39.1% of all roles, there are just 18 female CEOs across the FTSE350. Despite this clear lack of representation, the UK is now second only to Norway for having the highest percentage of women on corporate boards, highlighting the global scale of the issue.
Fiona Cannon, Group
Sustainable Business Director, Lloyds Banking Group, which along with KPMG is a Review sponsor, said: “There is no shortage of talented women; we need to ensure the opportunities are there for them to succeed.”
OVERCOMING INVISIBLE BARRIERS In isolation, mandatory gender pay gap reporting – and more inclusive and flexible mobility policies – will not improve opportunities for all women. However, pay gap reporting does help make visible and provide useful shorthand for the structural, conscious and unconscious obstacles to greater equity of opportunity for women in the workplace, as well as encourage accountability and ownership of this important issue among employers. For this reason and others, the
UK’s largest organisations are now facing pressure to assess and publish their pay gaps by ethnicity in a similar manner. Official government research in 2019 found that people across six of the ten categories earned less per hour than the median White British person. MPs on the cross-party Women
and Equality Committee called in February for the introduction of a law from April 2023 as “a first step in addressing pay disparities between employees from different ethnic backgrounds”. The move comes five years after Baroness Ruby McGregor- Smith, former Chief Executive of Mitie Group and now CIPD President, published a government- commissioned review into race in the workplace. “BME individuals in the UK are both less likely to participate in and then less likely to progress through the workplace, when compared with white individuals,” she concluded then. “Barriers exist, from entry
through to board level, that prevent these individuals from reaching their full potential. This is not only unjust for them, but the ‘lost’ productivity and potential represents a huge, missed opportunity for businesses and impacts the economy as a whole. In the UK today, there is a structural, historical bias that favours certain individuals. This does not just stand in the way of ethnic minorities, but women, those with disabilities and others.” Mercer suggests that the drive
to making inclusion and equity visible through pay gap reporting is favourably received by employers. Its UK Gender and Ethnicity Pay Gaps found 65% supported legislation enabling ethnicity pay gaps to be reported on and addressed. Almost half (45%)
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