Women are pushing through the glass ceiling.
A higher percentage of women are on the boards of FTSE 350 companies. Women are setting up their own businesses. And women are continuing to thrive in industries that have for too long been predominantly male domains – construction, technology, finance.
But there is a long way to go to smash that ceiling completely. Even though the gender pay gap is at its narrowest level on record, it still stands at 18.1 per cent. That’s 18.1 per cent too high.
We need to push further to eliminate it, not only because it’s fair, but because it’s good for our economy. I’m saying this as a former businesswoman, as well as a government minister.
According to McKinsey, eliminating work-related gender gaps could add £150bn to our country’s annual GDP in 2025. As we leave the EU, we need to build a modern and forward-looking Britain where success is defined by work and talent, not by background or gender. Far too many highly skilled workers are being forgotten or overlooked. This is an opportunity the UK – and British businesses – cannot afford to miss.
If these issues are going to be tackled, they need to be brought into the light. That is why from today the government is requiring large employers with 250 or more staff to publish their gender pay gap and bonus pay gap for the first time. This follows the government’s commitment to introduce the requirements at the last election and is a key part of our work to eliminate the gender pay gap. These regulations will help drive culture change in our workplaces and create a diverse workforce that makes the most of everyone’s talents.
The gender pay gap exists for many reasons, which are often complex and overlapping. Women are less likely to progress to senior roles and within higher paid sectors, such as finance or STEM, which tend to be male dominated. There is a lack of high-skilled jobs available to women who need to work part time. And women who take time out of work, most often to raise a family, earn less money when they return, receiving around 2 per cent less for every year they spend out of paid work.
That is why it’s so important that employers have the data to understand why the gender pay gap exists in their organisation. The figures will be based on hourly wages, helping to account for those who work part time. It will also show the distribution of male and female earnings across an organisation, helping to show where women are struggling to progress to the very top.
But reporting is just the beginning. With this transparency, employers will be able to take action to close the gaps, and ultimately improve their bottom line.
I love being a mother and a career woman but I wouldn’t have been able to carry on working while raising my two boys had I not had help from my family. Too many women feel unable to progress in their careers, especially after starting a family, and employers are losing talented individuals and corporate memory from their workplace.
Government is playing its part, introducing shared parental leave and new rights to request flexible working, as well as offering 30 hours of free childcare to working parents from September. In the Budget we also announced £5m which will be invested in developing schemes to help people return to work after a career break.
But we need individual employers to look at what they can do in their own organisations. This could include introducing more flexible working arrangements, setting up their own returner schemes, or using new recruitment methods – particularly in finance and STEM industries. Removing these barriers will mean that every employee will be able to fulfil their potential. That is good for morale, which is good for productivity and ultimately good for business.
Reporting doesn’t only support women’s economic empowerment, it’s a smart business move. It’s an opportunity to fix a problem that is holding business back, significantly increase our GDP, and open doors previously closed to female employees. There has been no better time to be bold and take action for change and I am confident that British businesses will rise to the challenge.