The spotlight is shining on the gender pay gap now that pay transparency has come into force. Companies of 250+ employees must report the difference in pay between their men and women by April 2018.

This transparency is more important than ever, with CMI’s recent research revealing that the gender pay gap is bigger than originally thought, now reaching 27% – the equivalent of £12,000 a year between male and female managers. So why is this stubborn issue still plaguing our workforce, and how can we achieve gender parity in such a male dominated environment?

What’s the problem?

The root cause for the gender pay gap is down to the ‘glass pyramid’ concept. More young women are graduating from university and entering the professional environment. Women dominate the junior roles at the bottom of the ‘glass pyramid’ with the representation dropping the higher up the pyramid you go, and for the few who do reach the top, the pay gap widens considerably. While women comprise 66% of junior level roles, women hold just 36% of senior management roles, with female representation dropping even further to 26% at director level.

The reason for this? Male managers are 40% more likely to be promoted than women, creating a ‘missing middle’ of women progressing through middle management.  

Why are men more likely to be promoted than women? There are many reasons for this but the underlying cause is business culture. CMI’s research shows that gender discrimination is still rife in the workplace, with 81% of managers having witnessed some form of gender discrimination or bias in the past year. More often than not it’s these small ‘broken window’ behaviours – the inappropriate remarks, interrupting women in meetings or dismissive remarks about maternity returners’ ambitions – that cause a discriminatory culture. We tend to let these behaviours slide, yet to tackle the bigger issue of pay and promotion, we need to tackle the little things first.

Why does it matter?

We know that diversity delivers better results. Women are an under-used resource and as a result business is missing out on this talent. According to management consultants, McKinsey, closing the gender pay gap will add £150bn in GDP by 2025. Having a diverse and gender balanced leadership team avoids group-think and reduces risk when it comes to decision making. Companies with a female CEO benefit from a 19% premium on their ROE, with an 18% premium for companies with a diverse management team. Addressing your gender pay gap makes you more competitive and allows you to benefit from a diverse set of skills and ideas.

What can we do about it?

The introduction of the gender pay gap regulations are an important step in highlighting that organisations do have a gender pay gap, but will also focus their attention on the root cause of their pay gap.  As we’ve seen with the example of the BBC recently, shining a light on the issues accelerates change.

The gender pay gap should not just be the issue of those in senior positions. Everyone in the organisation should be aware of the reality and the progress organisations are making in tackling their gender pay gap. It should be everyone’s responsibility. The best way to achieve this is including gender diversity targets in staff’s performance objectives. After all, what gets measured gets managed.

To change culture and behaviours, we need to encourage people to engage emotionally and rationally with the reasons for tackling the gender pay gap. It’s important to feel empathy. We need to call out bad behaviours and celebrate the good. Celebrate the managers – both men and women – leaving work early to attend their child’s sports day, or leaving a conference call early to make bath time. Recognising the role models who are balancing their work and home life sets an example. These behaviours should be the norm, not the exception.

Rationally, we need to promote practices such as balanced recruitment, agile working and sponsorship to help recruit, retain, and develop women managers. As men typically dominate the senior roles, men need to be advocates for talented women and encourage them to progress up the ladder.

Lastly we need to take note of the little things. These should be the easiest to resolve but will have a significant impact on the bigger picture – the gender pay gap. Managers at all levels – and particularly men in senior roles – must call out the ‘broken window’ behaviours that discriminate against women.  

Tackling the gender pay gap is not only good for the economy, it’s ethical and it makes sense! We’re a long way off achieving gender parity in the workplace, but by taking the opportunity to reflect on the root causes for the gender pay gap, accelerated by the government regulations, we are taking the first step to benefitting from an inclusive and more competitive environment.

CMI is at the forefront of driving gender balance in the workplace following the launch of their CMI Women initiative in November 2016. They have launched their own Blueprint for Balance online portal to provide research and guidance to help share best practice.