Closing the gender pay gap could boost UK economy by £85bn
PwC’s annual Women in Work index urges businesses to offer greater support to returning mothers and more opportunities for flexible working
If the UK’s businesses take action to close the gender pay gap they would increase female earnings by as much as £85bn, according to the PwC’s annual Women in Work index.
This figure has already risen by £5bn since last year’s analysis, with a stubborn 17% difference still existing between male and female wages – slightly higher than the global average of 16%.
PWC reports that one of the main factors behind this pay gap, accounting for 33%, is that women tend to spend more time out of work caring for children and family than their male counterpars. As a result, women are more likely to work in lower-paying positions and occupations that offer greater flexibility.
On the back of the report, policymakers and businesses are advised to do more to get support women in the workplace and in higher-paying positions.
How does the UK compare in the world rankings for equal pay?
The UK has risen slightly from 14th to 13th position in the world rankings, with Nordic countries Iceland, Sweden and Norway making up the top three.
While in the year 2000, the UK ranked at around average on the index – it fares well against comparable countries such as France (17), Germany (19) and the US (20).
If the UK were to increase female employment rates to those of Sweden, the report estimates an additional 9.1% rise in GDP could be created, equating to £170bn.
Financial services: the worst offender for pay equality in the UK
Despite being one of the most important industries in the UK and Ireland, the financial services sector ranked worst for pay equality at 34%. It was followed by energy and utilities (26%) and manufacturing (24%).
Admin and support services had the smallest pay gap (12%), with public administration (15%) and education (15%) ranked in joint second and health & social care in third.
With a host of young start-ups continuing to disrupt financial services, the report has cited that the sector has an opportunity – and a responsibility – to improve pay parity and forge a path for other industries to follow by example. While the sector may demand more regimented working hours, more could be done to support flexible and part-time working at senior levels and help women return to the workforce more effectively…
There’s more work to be done
The Women in Work index claims that, at current rates of progress, it would take a staggering 95 years to close the pay gap globally while for the UK it would take another 24 years. This means gender pay equality wouldn’t be achieved until 2040 – there’s clearly still a lot to be done.
Read more on this here: Why it’s time to stop talking about gender diversity in tech – and ACT!
What can businesses do?
The report suggests that the pay gap is symptomatic of skills shortages faced by businesses and a lack of diversity in leadership roles.
There are a number of actions businesses could take to improve the gender pay gap – and in doing so they could help themselves.
Businesses that work to address gender inequality in the workplace could create a deeper and more diverse pool of talent to draw from, improve employee retention and engagement.
The key actions that businesses could take, as advised by PWC, are:
- Supporting women returning to work after having children – businesses need to address recruitment biases to ensure women can return to positions that reflect their skill level through return to work programmes
- Supporting women’s career advancement – organisational culture and performance review processes could be implemented to recognise the skills of female employees on performance instead of hours worked
- Providing greater opportunities for flexible and part-time working – providing greater autonomy for female workers to choose their hours and where they work can prevent occupational downgrading and help women with families continue their careers
Last year Startups.co.uk shone a light on the inspirational female founders behind some of the UK’s most exciting early-stage businesses by profiling some of the female entrepreneurs killing it in the UK start-up scene.
Debbie Wosskow OBE, CEO of Love Home Swap and co-founder of AllBright, has commented on closing the gender pay gap in the UK:
“Now is a great time to be a woman in business in the UK. Whether that is a woman working in a corporate company or a woman running her own business, it is clear that there is opportunity all around us.
“But, unfortunately, there is still a long way to go to truly level the playing field and close the gender pay gap for women in employment or close the funding gap that exists for female founders.
“One of the ways to bridge these gaps quickly is to make sure that supporting services are more accessible than ever to women. Support means different things to different people so there is a job to be done here to ensure that the women are able to find and get the right type of support – there needs to be sign posts to help with everything from mentoring, to finance, to help with how to work flexibly for those that need it.”