Equal Pay Day 2023 | 'Still a long way to go' to close gender pay gap, HR expert warns

'Still a long way to go' to close gender pay gap, HR expert warns

Today, November 22, marks the point in the year at which on average, UK women stop earning money professionally, when compared to the wages of their male counterparts.

The day, known as ‘Equal Pay Day’, takes into account wage disparity based on gender, and essentially shows that women ‘work for free’ from this date until the end of the year, if their wages are compared to those of their male peers.

The gender pay gap is the difference between the hourly pay of women and men, as a proportion of men's pay. This year, Government data has indicated a mean gender pay gap of 10.7% for full-time workers, which is how this year’s Equal Pay Day has been calculated to fall on November 22. Last year’s event took place on November 20, and 2021’s campaign took place on November 18.

According to calculations by the Fawcett Society, on average, working women take home £574 less than men each month (£6888 p/a). This means at the current rate of change, the gender pay gap won't close until 2051.

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The data also indicates that women aged 40 and older (those born before 1983) won't see the gender pay gap close before they reach State Pension age.

Therefore, to mark 2023’s Equal Pay Day, the Fawcett Society has released new data and a report which shows that making flexible work the default in high-quality, high-paid jobs is essential if we are to see the gender pay gap close more quickly.

Their data shows that women are accessing flexible work associated with lower-paid, lower-quality work e.g. part-time, insecure work and zero-hours contracts, in order to balance their caring responsibilities, and that this contributes to the UK's pernicious gender pay gap.

The Fawcett Society’s evidence shows that:

  • 40% of women who aren't currently working said that access to flexible work would mean they could take on more paid work (32% of men who aren't working and 37% of people overall said the same)

  • Women were significantly more likely to report working part-time (27%) compared to men (14%)

  • Men were more likely to report having access to more desirable forms of flexible work—for example working term time only (outside of an education setting) (21%), working as part of a job share (18%), working a number of set hours flexibly across the year (15%) or working to commissioned outcomes (10%).

  • 77% of women agreed that they would be more likely to apply for a job that advertises flexible working options.

Harriet Harman, Chair of the Fawcett Society, said: “The gender pay gap is closing far too slowly. At the current rate of change, women over 40 will suffer the pay gap until they retire. This is unfair and unjust, and it hurts everyone. A thriving economy relies on the full participation of women, and we are currently locking women out of work they are qualified for and capable of doing.

“For too long, women have put up with less fair and less equal working arrangements in exchange for flexibility. We need urgent action to ensure women are allowed to work to their full level of skills and experience. making flexibility the norm will make it easier for women to get the flexibility they need, and also normalise men taking on their fair share of caring responsibilities. We cannot afford to wait.”

Dr Zara Nanu MBE, Director, Fair Future of Work Strategy, at XpertHR, commented: “Equal Pay Day – the day of the year when women’s earnings effectively stop compared to men’s – puts the extent of the gender pay gap into perspective and reminds us that there is still a long way to go until pay equity is achieved. But organisations should not feel discouraged – we have never been more equipped to enact change than we are today, especially with the technology to identify, analyse, and address core pay disparity gaps available and at the disposal of total reward and compensation leaders.

“Organisations have told us how dedicated they are to addressing the gender pay gap – with 75% naming pay equity as a key business priority in 2023 – but it is time for leaders to turn intent into action. The first step is getting the basics right: establishing the best tools and work processes and ensuring they are being carried out correctly and regularly. Only by conducting ongoing equity analysis, quarterly, or every other month, can businesses stay up to date on pay fairness within their organisation. Doing so will serve to keep leadership informed about inequities and provide essential insights to act proactively in correcting any pay gaps.”

XpertHR’s insights on Equal Pay Day

Research by XpertHR and Executive Networks, published in a report titled – 2023 Pay Equity and Transparency Study: Actionable Insights for a Fair Future of Work – shows that:

  • Three quarters (75%) of senior leaders believe their company prioritises pay equity, but less than half (47%) of their employees agree.

  • Nearly half (47%) of HR leaders believe not taking action on pay equity leads to reduced employee retention, while 44% of business leaders say it can damage productivity.

  • For HR leaders, the biggest advantage of addressing pay disparity gaps is improving diversity, equity, and inclusion in their workforce (54%), while business leaders are focused on increasing productivity (47%).

  • Almost half of business leaders (45%) say that the CEO should be responsible for leading pay equity initiatives, while senior HR leaders are significantly more likely to say the CHRO should be responsible (25% vs. other business leaders 14%).

  • A quarter (25%) of female employees report having no salary conversations with their managers, compared to just 16% of male employees.

  • More than three-quarters (76%) of male employees agree that they have a good understanding of how pay is determined at their organisation, but a lower proportion of female employees (61%) said the same.

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In its Pay Transparency: Recruitment Survey 2023, XpertHR found:

  • Companies with transparent job adverts report a 9% gender pay gap, as opposed to 19% for those without.

  • There is a higher proportion of females in top paying roles in organisations that disclose salaries in all job adverts, with a median of 65%. This figure drops to 33% in organisations with partial pay disclosure, and further declines to 24% in those with no salary information in adverts.

  • Only half (50%) of UK organisations include salary information in all job adverts, with 29% including salaries in some.

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