Women represent almost half of the UK workforce and increasingly hold influential positions.
However, evidence from a range of studies suggest our labour market is still failing to make the best use of people’s talents. In particular, pay levels for women, while improving, still do not reflect their qualification levels.
Gender pay gap
The Office for National Statistics collects data on earnings through the Annual Survey of Hours and Earnings which it uses to calculate gender pay differences. There are a number of different ways of calculating the gender pay gap.
The pay gap between full-time men’s and women’s median earnings stands at 9.1 per cent, whereas the overall gap when comparing the pay of all men and women in work is 19.5 per cent.
We have conducted research into the causes of the gender pay gap. This found the key factors explaining the pay gap were as follows:
- 22 per cent of the gap is due to the different industries and occupations in which women work
- 21 per cent of the gap is due to differences in years of full-time work
- 16 per cent of the gap is due to the negative effect on wages of having previously worked part-time or of having taken time out of the labour market to look after family
- only 5 per cent of the gap is due to formal education levels
But a significant proportion (36 per cent) of the pay gap could not be explained by any of these factors, suggesting discrimination may still be an important factor
The Office for National Statistics also publish statistics on gender pay gaps in the Civil Service, through the 'Civil Service Statistics' publications. In March 2011 the difference between the median pay of men and women was:
- 18.4% in the Government Equalities Office
- 13.2% in the Home Office
- 15.6% in the Civil Service as a whole
Improving transparency on pay and other issues
The government is asking private and voluntary sector employers to help tackle the pay gap through greater transparency on pay and other issues such as workforce composition.
On 14 September we launched a new voluntary framework for gender equality reporting with Eversheds, BT, Tesco and the CBI. The "Think, Act, Report" framework asks private and voluntary sector employers to help tackle the pay gap through greater transparency on pay and other issues. For further details please see Voluntary Gender Equality Reporting.
The Government recently consulted on proposals to encourage a more fair and flexible approach at work and tackle the barriers to equal opportunities.
- extending the right to request flexible working to all employees
- a new system of flexible parental leave which will allow mothers and fathers to share leave and give parents and employers greater choice about how leave is taken
- tackling unequal pay through requiring employers who lose an Employment Tribunal case on equal pay to carry out a pay audit
The consultation closed on 8 August 2011, and we are now considering the responses we have received.
Women on boards
In August 2010 Lord Davies was tasked by the government to lead a review into how obstacles can be removed to allow more women to reach Board level positions in organisations. Following a wide consultation Lord Davies published his recommendations in February 2011.
The review recommended that UK listed companies in the FTSE 100 should be aiming for a minimum of 25% female board member representation by 2015. It also recommended that FTSE 350 companies should be setting their own challenging targets. Lord Davies called on chairpersons to announce these goals within six months of his report.
On 12 October 2011 Cranfield University published a six month progress report detailing the developments made following the Lord Davies recommendations. The report finds that 61 of the FTSE 100 companies have responded to the Lord Davies review, acknowledging that gender diversity is an issue, with 33 setting themselves the target for the percentage of women they aim to have on their boards.
The government has set a new aspiration that by the end of the current Parliament 50 per cent of all new appointments to public boards will be women.
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