A decade ago, menstruation, menopause and miscarriage were taboo subjects in the workplace; only 20% of those on FTSE 100 boards were women and mandatory pay gap reporting did not exist. But, while progress has been made on some of these fronts, women continue to face inequalities in the workplace.
On average, for every £1 earned by a man in the UK, a woman earns 90p, even when they have a similar personal and professional background, according to PwC’s Women In Work 2024 report. Meanwhile, the rising costs of childcare and a lack of universal menopause support, means women are leaving the workforce in their droves. The Fawcett society estimates that 250,000 women have been driven out of work due to the challenge of balancing work and childcare.
This represents a drain on talent that businesses simply cannot afford but too few companies are taking long-term action on gender equality to solve these issues, according to journalist, author and co-founder of the Women in Work Summit Mariella Frostrup. In her view, businesses can close the gender equality gap more quickly by focusing on three key areas: health and family support, fair pay and equal opportunities in career progression.
“Working women want and deserve those three simple things,” she says. “Most companies tend to make progress in one area – leadership diversity, pay or policies – but need help to improve across the board. Change starts with a long-term commitment, from every employer, to make this a reality.”
Where is progress being made – and where isn’t it?
Frostrup believes the greatest progress towards gender equality has been in board diversity. She notes that, while all-male boards were common in the past, women now represent 40% of FTSE 350 board members.
The next step, she adds, is for these diverse boards to hold the rest of their company to account when it comes to improving female representation and fair pay at all levels. “Companies can’t justify having too many high-paid men and too many low-paid women,” she says.
The most “frustrating” area is the ongoing pay gap, Frostrup notes. The gender pay gap has widened in Britain with men earning 14.5% more than women, according to PwC’s Women at Work Index 2024 report – up from 14.3% the previous year. The findings suggest that biases and structural inequalities in the workplace continue to contribute to pay disparities between men and women.
“Although companies with over 250 employees are legally obliged to publish their pay gaps, not all have committed to working harder to solve them,” Frostrup says. “If you take the time to read one of these pay gap reports, it’s clear which companies are still trying to defend the indefensible.”
“There are many large employers closing the pay gap every year, and many who already have hourly pay gaps under 10% or even flat,” she continues. “The data is public and shows that every sector can achieve equal pay.”
Frostrup points to FTSE 100 company Diageo as an example. The drinks producer has a median gender pay gap of 6.6% in favour of women and seven of its 11 board members are women. It also supports women through a range of progressive policies and mentoring schemes.
How to close the equality gap
Through a combination of awareness, action and accountability, Frostrup is confident that companies can close the equality gap “once and for all”.
A good place to start, she says, is by collecting detailed and meaningful data that can help organisations identify any gaps. “First, aim for symbolic quick wins before setting tougher targets that will have longer lead times,” Frostrup says. “If pay gaps do exist, gain a forensic understanding of like-for-like differences in your organisation and there underlying causes to ensure interventions and time frames are realistic.”
It is important to show that a path to the top is possible and equitably rewarded. Frostrup recommends that businesses support the progression of female staff into more senior roles, as this has the most substantial impact on reducing gender pay gaps.
Employers who are serious about achieving gender parity should start with equitable and transparent policies. One of the most impactful policies, Frostrup says, is access to paid parental leave. Not only does it reduce employee churn and boost career earnings for working mothers, but for every month of paternity leave a father takes, a mother’s earnings increase by 7%.
“Companies want to hear what success really looks like, but they also want to hear real leaders being honest about the challenges,” she says. “That’s why we launched the Women In Work summit last year. It was really inspiring to hear some of the biggest CEOs sharing why and how they are making women in work a priority. Sharing learnings is the best shortcut to accelerating progress.”
Ultimately, it is up the C-suite to hold the business and themselves to account through measurement and targets. “The best companies set KPIs and timescales then commit to them – going deeper than just annual pay gaps or gender promotion reports. They demand year-on-year progress.”
Leadership teams should benchmark their progress externally and share what works, Frostrup adds. “They need to walk the walk and commit to a clear, measured action plan. Instead of shying away from big gaps, they need to be honest about the timeframes and effort needed.”
Results will not happen overnight. But transparency with numbers and target-setting can help evaluate the impact of schemes and initiatives. “It will hold leadership teams to account so they consider these as growth targets they can’t ignore and constantly measure results to accelerate progress,” Frostrup says.
Why gender equality is a business opportunity
There is a clear commercial advantage to be claimed from gender equality. Companies in the top quartile for gender diversity on their boards are 25% more likely to deliver above-average profitability than those in the bottom quartile.
“Just like with sustainability, companies see the business opportunity that improving diversity represents,” Frostrup says. “They are focused on unlocking it by listening to female employees, investing in building talent pipelines, applying data and strategy to pay-gap challenges and designing female health and family policies for every life stage.”
Eliminating the motherhood penalty, for example, which sees 24% of women leave the labour force in their first year of work, could have a far-reaching impact on the UK economy. Just a 5% increase in the total number of women in employment could boost UK GDP by up to £125bn every year, according to PwC.
Frostrup adds: “Late adopters are waking up to the reality that closing the equality gap is not optional, if they don’t do it they risk missing a huge opportunity. Women are 50% of the world’s population of primary decision-makers after all. I’d like to see all employers make a commitment, for their daughters, nieces, and granddaughters, to close the equality gap in our lifetime.”
Mariella Frostrup will be at the Women in Work summit later this year. Register here to receive 25% off the UK Summit tickets - September 26th, 2024. Register here to receive 25% off the US Summit tickets - October 30th, 2024.
