Prime minister starts fight against gender pay discrimination

14 July 2015 -

Proposed legislation will force companies to disclose differences in pay for men and women, but will that be enough to stop gender discrimination in the workplace?

Matt Scott

Big business will be forced to publish figures regarding gender pay discrepancies under proposals to be unveiled by prime minister David Cameron today.

Cameron is set to launch a consultation on legislation that will require companies with 250 or more employees to publish the average salaries for men and women in their workforce.

The prime minister will say it will "cast sunlight on the discrepancies and create the pressure we need for change, driving women's wages up".

According to 2014 gender pay gap data from CMI, professional females earn three-quarters of the pay of their male counterparts – an average gap of £9,069.

The pay gap becomes more pronounced with age and seniority; for women aged 45-60 the average pay gap grows to 34% (£16,680).

Responding to the government’s proposals, Ann Francke, chief executive of CMI, said the proposed legislation would mean there was ‘no hiding place’ for employers who did not pay women a fair wage.

“Transparency is the most powerful driver we have for achieving change and this legislation will be good news for women and business alike,” she said. “It will mean there’s no hiding place for employers who don’t pay women fairly.”

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Listen to the full interview with Ann Francke on the topic of the gender pay gap.

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And, while she welcomed the announcement by the prime minister, Francke wants more needs to be done, calling on the government to go further than the current proposals and include a breakdown of pay across different seniority levels.

“Businesses should report on more than just average pay rates,” she said. “Given that the gender pay gap is widest at the top, it is vital that companies track pay across different job levels.

“And, of course, the pay gap isn’t the only problem facing women at work, as the lack of women in senior roles is still a huge problem. While we embrace this push for transparency, employers must focus on three things to galvanise wider cultural change when it comes to diversity – data, recruitment and culture.”

Three ways to stop gender discrimination in the workplace

• Data: Setting targets, and collecting and analysing data on employee demographics is essential to developing an action plan – after all, ‘what gets measured, gets managed'

• Recruitment: Recruiting has to be a demonstrably fair and open process, one which precludes the possibility of candidates being preferred because ‘their face fits’. It must encourage women to pursue careers in all fields, like STEM

• Culture change: Businesses must make employees’ working environment more inclusive. Flexible working arrangements, greater support for those caring for children or relatives, and mentoring by senior managers – all are fantastic ways to retain and help employees of both sexes

“These measures will help unblock the talent pipeline and deliver real diversity across the next generation of managers and leaders,” Francke added.

The move from the prime minister comes after the government announced that a target of filling at least a quarter of boardroom seats at the UK's biggest firms with women had been met.

Lord Davies set the target in 2011 after a review into the gender balance on company boards.

The Inspiring Women 2015 Conference from CMI is taking place in London on 19 November 2015. Find out more about the full-day conference here.