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Pay Gap: Flaws in our culture not in our gender

Insight

02 March 2016

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Why the pay gap isn’t about gender difference

Last year Justin Trudeau, Canada’s current prime minister, was asked by a reporter “I understand one of the priorities for you was to have a cabinet that was gender balanced, why was that so important to you?” his response was cuttingly simple: “because it’s 2015”. This statement is a great tribute to how far the fight for gender equality has come, however, the pay gap statistics provide tangible evidence of how far we still have to go.

The Equal Pay Act came into force in 1975 and yet figures from the Office for National Statistics suggest women are still getting paid 19.2% less than their male counter parts.1 Factoring part-time workers out the equation the figure does drop to 9.4%, which is certainly the lowest on record; however, factor bonuses back in and the gap swells once again. Research from the Chartered Management Institute, for example, suggests that when it comes to bonuses male managers are on average getting almost double that of female’s in equivalent roles, £2,531 vs £4898 to be precise. 2

From 2018, organisations’ with over 250 people will have to reveal their gender pay gap with the worst offenders being named and shamed on a published league table. This is certainly a positive step. However, why in 2016 do we have a pay gap at all? And, why is this step necessary from the government?

To find out more about what’s sustaining the pay gap in today’s world, I delved into the research literature and what I found is that the gap isn’t really about gender at all, it’s about the biases in our thinking and flaws in our culture.

 

So, what is causing the gap according to research?

1. Gender differences?

One explanation has been gender differences, with studies finding women to be less willing than men to negotiate, take risks or compete. 3, 4 In this line of reasoning the gap is a “don’t ask don’t get” issue for women with the solution seen as training women in the skills they lack.

These findings, and this line of reasoning, has certainly set hares running; Boston City, for example, released plans this year to train 85,000 women in negotiating skills. 5 A big investment but when you look closer at the research this is an initiative running in the completely wrong direction for two key reasons.

Firstly, research has shown differences between men and women only account for 16% or less of the total gender pay gap, with one study indicating ‘less’ to be as little as 2.5%. 6 So, right off the bat this demonstrates how gender differences are not the main issue here.

 

Secondly, when it comes to personality traits the same traits are rewarded differently when displayed by men and by women. More precisely, characteristics for which men are rewarded often elicit negative, or less positive, responses when exhibited by women. 6,7 Making it less a case of “don’t ask don’t get” and more a case of “damned if you do damned if you don’t”.

Take agreeableness (i.e. being trusting, straightforward, warm, modest and sympathetic): findings suggest women are, on average, more inclined to be agreeable than men. But, and here’s where it gets interesting, findings have also shown men, and men alone, earn a premium for being disagreeable, with levels of disagreeableness positively correlated to male wages but unrelated to women’s wages. 7 So, as a women, even if you did exhibit this more ‘male’ trait it only pays off if you are in fact a male.

Furthermore, if we interpret and reward traits differently as a society, how can we be certain the gender differences identified in research (i.e. negotiation, agreeableness, competitiveness) are not in fact caused by this social conditioning in the first place?

2. What about gender differences in occupations and industries?

Yes, these account for a large proportion of the pay gap, predominantly driven by biases in our culture pushing girls and boys to choose certain subjects at school and pursue certain careers.

3. Flexible working practices – there but not embedded or socially accepted

Research shows that while many companies have adopted flexible working practices to support women returning from maternity leave, in reality new mothers are often treated differently. This plays out in the little things, such as the “having a half-day” jokes and larger things, for example in law firms where billable hours and “presenteeism” count for more than the quality of work part-timers can achieve. 8

These seemingly insignificant factors are all contributing to a higher drop-out rate for women, which in turn are causing fewer women to reach senior positions thus adding to the pay gap.

 

Everything I have read, and various other pieces of evidence, such as the fact that 28% of adults agree “it’s generally better for a marriage if the husband earns more than his wife”, lead me strongly to the conclusion that reducing the gap is about identifying and challenging the assumptions and biases rooted deep within our culture and in your organisation. 9 It’s not about mass upskilling of women it’s very much about culture change.

 

So what can you do about the gender pay gap in your organisation?

  • Increase awareness of gender biases
  • Put in places nudges to reduce stereotype threat
  • Role model correct behaviours/ attitudes towards flexible working
  • Carry out an artefact analysis to get bias out of your recruitment procedures, job role identities and internal communications

 

Why do it? Minimising the gap is not only the ‘right thing to do’ but the smart thing for your business. After all it is 2016.

 

References

1. Office for National Statistics. (2015). Annual Survey of Hours and Earnings (ASHE). Government Report Retrieved from: http://www.ons.gov.uk/ons/dcp171778_424052.pdf

2.Chartered Institute of Management. (2015). Women work unpaid for 2 hours each day. CIM Research, retrieved from:http://www.managers.org.uk/insights/news/2015/august/women-work-unpaid-for-2-hours-each-day?sc_trk=follow%20hit,{86CB756B-AB02-44E6-995A-305C69252B29},whilst+women+in+equivalent+roles+receive+%c2%a33%2c029

3. Bertrand, M. (2011). “New Perspectives on Gender.” In Handbook of Labor Economics, Volume 4b, edited by Orley C. Ashenfelter and David Card, 1545-1592. Amsterdam: Elsevier, Ltd.

4.Croson, R., & Gneezy, U. (2009). Gender differences in preferences. Journal of Economic literature, 448-474.

5.Inc. Magazine (2015). Boston wants to train 85,000 women to be better negotiators. Retrieved from: http://www.inc.com/kimberly-weisul/boston-wants-train-women-negotiate-better.html?cid=sf01001&sr_share=twitter

6.Blau, F. D., & Kahn, L. M. (2016). The Gender Wage Gap: Extent, Trends, and Explanations. IZA Discussion Paper.

7. Mueller, G., & Plug, E.J.S. (2006). “Earnings Effects of Personality.” Industrial & Labor Relations Review, 60, 3–22.

8. Easteal, P., Caligari, A., Bartels, L., & Fitch, E. (2015). Flexible Work Practices and Private Law Firm Culture: A Complex Quagmire for Australian Women Laywers. QUT L. Rev., 15, 30.

9.Wang, W., Parker, K., & Taylor, P. (2013). Breadwinner Moms: Mothers are the Sole or Primary Provider in Four-in-Ten Households with Children; Public Conflicted about the Growing Trend. Washington, DC: Pew Research Center

 

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