The government's plan for companies to reveal pay differences between men and women received cautious backing from the business world yesterday, yet critics insist it will not improve equality in the workplace.
Feelings from major City firms were mixed after David Cameron announced that large companies will be required to hand over data on employees’ wages in a bid to reduce the gender pay gap.
Katja Hall, CBI deputy director-general, said that her organisation would happily work with the government, but cautioned: “To see real progress we need to challenge occupational stereotypes by encouraging more women into male-dominated industries and investing in careers advice.”
The Institute of Directors (IoD) said that, despite endorsing greater transparency, it did not believe that the publication of averages would improve pay rates. James Sproule, the IoD’s director of policy, said: “Measuring pay gaps is very complex, and averages do not show whether companies are paying people different amounts for the same work. The long-term solution is to get more women into senior executive positions.”
Other commentators in the City praised the initiative but said that the scheme’s emphasis on average pay could be too blunt a measure.
“Transparency is the most powerful driver we have for achieving change and this legislation will be good news for women and business alike,” said Ann Francke, chief executive of the Chartered Management Institute. “It will mean there’s no hiding place. But businesses should report on more than just average pay rates. Given that the gender pay gap is widest at the top, it is vital that companies track pay across different job levels.”