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26% of women earning less than the Living Wage, report reveals on Equal Pay Day

Following recent news that 5.5m working people in the UK earn less than the Living Wage, further findings reveal women are hit hardest by low pay in the UK, ahead of Equal Pay Day (10th November 2017).


  • Women make up nearly two thirds (62%) of workers currently struggling to make ends meet on less than the real Living Wage
  • This amounts to 3.4m women compared to 2.1 million men
  • Nearly 1/3 of all UK working women (26%) are still earning less than the Living Wage, compared to just 16% of all working men


This trend has been the case since 2011, when KPMG and the Living Wage Foundation launched its annual Living Wage report.


Further research from the Living Wage Foundation has also found that there are serious consequences for working mothers who earn below the real Living Wage, with four in ten (42%) admitting they have skipped meals for financial reasons.


Equal Pay Day (Friday 10th November) aims to highlight the day of the year where women effectively stop earning relative to men. Recent ONS data shows the gender pay gap is not closing. The average for full-time workers stands at 14.1% a figure that hasn’t changed in the last three years.


Women’s employment in the UK is highly concentrated in particular industries and occupations and this concentration is a major cause of low pay for women. Cardiff Business School, have recently under gone research looking into the gender impact of the Living Wage and the positive impact the Living Wage plays on women’s incomes in the low pay sector.


The research highlights that females were more likely to be in part-time jobs (77%), and found the top occupations in which women are the majority of employees being, general administrative occupations (79.4%), personal assistants (97.7%) and receptionists (89.2%). The results from the research highlight that the Living Wage has substantial positive effects on women’s earning in low pay roles like these.


Commenting on the number of women earning below the real Living Wage and Equal Pay Day, Living Wage Foundation director, Katherine Chapman, said, “These figures show that more can be done to reduce the 3.4 million working women earning less than the real Living Wage across the UK. Women make up nearly two thirds of the 5.5 million people in low paid roles, who are feeling the squeeze as inflation rises. Equal Pay Day highlights the need to keep the conversation going on the realities of the gender pay gap and to encourage more organisations to pay a real Living Wage that will benefit women and part time workers nationwide.


“Earlier this week we announced the new Living Wage rates, which will mean cost of living pay rises for tens of thousands of women. It’s fantastic that over the last 12 months more than 1000 organisations have joined our network of 3,600 Living Wage employer who choose to go beyond the legal minimum and pay a real Living Wage, putting fairness and respect at the heart of their business. I hope next year we will see even more success and less people, both men and women on low wages.”


Announcements by the Living Wage Foundation on Monday revealed that at least 150,000 UK workers are set for a pay rise as the new Living Wage rates rise to £8.75 around the UK, and £10.20 in London.


The Living Wage rates are independently calculated, based on the real cost of living in the UK and London. The 2017 increases have been largely driven by higher inflation feeding through to the basket of goods and services that underpin the rates, with rising private rents and transport costs also having an impact.


Over 3,600, employers across the UK, including a third of the FTSE 100, household names IKEA, Aviva, Nationwide, Chelsea and Everton Football Clubs and Google, as well as thousands of small businesses, who are choosing to pay the real Living Wage to ensure all staff, including onsite contractors, earn a wage that meets the real cost of living.


Speaking on Equal Pay Day, Ann Francke, chief executive of the Chartered Management Institute, said, “Equal Pay Day for all women is 10 November, but falls earlier in the year the higher up the career ladder you go. According to CMI’s research, there’s a 27% gender pay gap among the UK’s 3.3m managers, where men outnumber women three to one. The lack of progress for women into more senior roles is one of the biggest causes of this pay gap. There’s a huge prize for businesses that get this right, because equal representation of men and women could add £150bn to the UK economy in the next 10 years.


“Transparency is a great driver for change. We urge the 98% of businesses that have yet to publish their pay gap data under the new government regulations to step up and put plans in place to fix the issue.”


Jody Goldsworthy, senior partner, leadership and talent practice at GatenbySanderson, added, “The core issues around diversity are similar across the public and private sectors. Across both, positive action is required. Carefully crafting job adverts and descriptions so that women are a) not turned off and b) encouraged to apply is an important starting point. This means ensuring that the right language is used and a positive image of the holistic role and context, including organisational culture painted. 


“Good recruiters - who encourage women to take the plunge even if they don’t tick every box – are also key. Research indicates that men are braver when it comes to applying for roles they haven’t quite got all the experience to do, whereas women are often more hesitant. Training for hiring managers and assessors on how to overcome unconscious bias and how to design inclusive assessments is also crucial.


“It is absolutely critical for companies to meet diversity targets. The vibrant society we live in is so diverse and currently, senior leadership is not. Women at a senior level bring real value. Research shows that decision-making is far more effective when individuals from a range of backgrounds and with varying perspectives are involved.  


“Targets and standards are set for a reason. However, I do question the realism of some initiatives and the value of meeting strict, set quotas in the short term. Organisations need to make sure efforts do not stop when targets are met -  increasing representation needs to be an on-going, long-term project.


“Targets and quotas cannot improve gender equality on their own. They will only make a real difference if the organisation has an inclusive culture which ensures staff respect and make use of diverse perspectives. It may be a surprise in the year 2017, but I often hear female non-executives talk about how gender difference gets in the way of effective chair and chief executive relationships. Even in this day and age, the stereotypes about how women and men are expected to behave, still play out and get in the way of people accepting each other for who they are. Until everyone on boards and in senior posts learns to recognise and overcome their own unconscious bias, it will inhibit the value organisations can get from gender equality.


“Having structures in place to ensure women are supported once in position is also key. Flexible and family friendly working is important, for example – to help with the transition back into the workforce after time off for childcare.”


Tony Prevost, HR director EMEA at Skillsoft, commented, "The fact that a gender pay gap still exists in 2017 is disappointing.  How can a modern society that prides itself on education, equality and innovation value women at effectively 80p on the £1?  Progress is being made.  The fact that larger businesses will have to report on their gender pay gap from next year is a significant step forward.  But there’s still work to be done – both in terms of educating businesses of all sizes about the issue and, as a last resort, introducing legislation to force compliance across the board.  

"Whilst recent legislation may try and help close this gap by forcing companies to disclose pay which could result in simply raising women’s pay, deep-rooted change needs to take place that identifies the reasons behind why the gap exists in the first place.  Is it down to unfair recruitment policies?  Is there a subconscious gender bias?  Is there a need for a more effective diversity policy?  Addressing an imbalance in gender pay is relatively straightforward - but it should be the first step in a wider strategy that ensures true fairness, equality and diversity – regardless of gender."


Ciara McGrath, head of HR at Instant, added, "The reality of the situation is that some women will conceal their status in relation to age, marital status etc to ensure that they are not seen as a higher risk with regards to hiring and/or promotion. Business leaders need to address this as a core value of their organisations, i.e. that both men and women are needed to ensure success, just as in society. Whilst it is fine to publish gender pay gap reports, leaders need to lead the charge with clear expectations of how to ensure that all are treated fairly. Possibly a bigger conversation, but in tandem, support structures also need to be improved so that parents who are dependent on childcare etc are able to avail of such support and remain in control of their careers."

 


Photo courtesy of Shutterstock.com


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