Tackle the gender pay gap and boost productivity

21 March 2016 -

The chair of the Women and Equalities Select Committee reveals why closing the gender pay gap should be a priority for all businesses

Maria Miller MP

The UK’s gender pay gap currently stands at 19.2%. While there’s been an outcry about this on the grounds of equality, the loss to productivity it represents has been much less widely focused upon.

My Committee’s recent report on the gender pay gap found that women are better educated and better qualified than ever before, yet old fashioned attitudes to work mean their skills and experience are not being put to use.

Research shows that the under-utilisation of women’s skills costs the UK economy between 1.3% and 2% of GDP every year.

Other estimates of the potential benefit of fully tapping into female talent in the economy show that raising the level of women’s employment to the same as men’s could lift GDP by 10% by 2030, and eradicating the full-time gender pay gap would contribute additional spending into the economy of £41 billion each year.

Despite this clear evidence of the gain that women can bring to the economy, the government does not have a coherent strategy to address the causes of the gender pay gap.

Part-time working, caring responsibilities and occupational segregation are the key causes of the gender pay gap. Without effective policies to tackle these issues the government will not meet its laudable goal of eliminating the pay gap within a generation.

Some in government, and business, think that as women achieve more the gender pay gap will disappear. Sadly evidence suggests that this isn’t the case.

It is true that the gender pay gap is most pronounced for those aged over 40, with women aged between 50 and 59 facing a 27.3% disparity. However, research by CMI shows younger women will continue to experience this pay gap as they age. Their National Management Salary Survey data found women still face a ‘glass pyramid’ and a pay gap that widens with age.

So why is this happening? We found that a large part of the gender pay gap is down to women’s concentration in part-time work.

Too many women are trapped in low paid, part-time work that doesn’t make use of their skills. This is partly due to their disproportionate responsibility for unpaid caring, but also because many of the sectors women work in, like retail and care, offer predominantly low-paid, part-time work.

Old-fashioned approaches to flexibility in the workplace and a lack of support for those wishing to re-enter the labour market are also stopping employers from making the most of women’s talent and experience.

A wealth of evidence shows that this does not need to be the case.

We heard from leading employers who recognise that workplaces need to change. EY and the CBI told us that flexible working is the route to a more engaged workforce, better utilisation of skills and increased productivity.

Flexible working for all lies at the heart of addressing the gender pay gap. But too often flexible working is confused with part-time work.

But part-time work often limits women’s career progression and traps them in low pay.

Flexible working is not necessarily about working fewer hours; it’s about adapting the workplace so men and women can access jobs shares, flexible hours, term-time working and working from home.

The government recognises the value of modernising the workplace, but is still not taking the steps needed to ensure flexible working is offered to all employees, particularly those in lower paid sectors.

Moving to a culture where flexibility is the norm, and employees are judged on outcomes rather than presenteeism, offers a tremendous opportunity to tackle the gender pay gap.

This is a challenge for employers and for government, but the benefits of taking action are clear.

By making flexible working the norm, supporting parents to share care and tackling the other causes of the gender pay gap, we can truly begin to make the most of women’s skills and experience, and in doing so develop a more competitive economy.

Maria Miller is the Conservative MP for Basingstoke and is the chair of the Women and Equalities Select Committee