Over the past decade we’ve become a generation of oversharers. Thanks to cultural phenomena such as Sex And The City and the rise of social networking, we are now well-practised at the art of openly discussing intimate details of our lives with friends and even strangers. Whether talking about our political leanings or discussing our sex lives, these days nothing is out of bounds. Except perhaps there is a final taboo: our salaries.
The question “How much do you get paid?” has the power to make the most open of us reach for our personal pause buttons. But why? “There are two issues here,” explains Penny de Valk, Chief Executive for the Institute of Leadership & Management. “Many people believe for personal and social reasons that income should be private as salary is an indicator of how a company values you and not everyone wants that information broadcast. However, it can also be said that many companies offer no salary data because they’d have difficulty in justifying the glaring pay differences that exist between men and women.”
So perhaps it’s our reluctance to openly discuss our salaries that is effectively allowing employers to hide behind this social taboo, thereby giving the gender pay gap the green light? If we don’t know how much our colleagues – both male and female – are being paid, how can we know if we ourselves are being paid enough?
MEN VS WOMEN
British women may be (slowly) battling our way into boardrooms and rich lists in a way that our grandmothers could never have imagined (thanks to JK Rowling we even have our very first British female billionaire), but is it enough? Women may now make up 46% of the UK’s millionaires but according to new reports from the Chartered Management Institute, female managers are still paid £10,000 less than their male peers and, based on the current statistics, equal pay for female managers is still a staggering 57 years away. Emmeline Pankhurst is probably spinning in her grave.
So while our salaries may have increased incrementally over the past 30 years, the gender pay gap has only marginally decreased. Nationwide, including both full-time and part-time work, women are still paid a demoralising 22% less than their male colleagues, with men taking home on average £28,270 compared to our £22,151. It’s even worse for women who work in IT. According to new research, the IT sector has the largest pay gap of any industry where the average salary for a woman is £32,751 and a much more substantial £50,487 for a man.
The pay gap persists despite the fact that women have better educational outcomes than men and up to the age of 44 are better qualified than men. In fact the Equal Opportunities Commission calculated that, over the course of her working life, the gender pay gap would lose an average woman working full-time a staggering £330,000 (or £210,000 after income tax and National Insurance contributions).
Globally, the situation for women isn’t much better. A TUC report reveals that women are paid on average 16% less than their male counterparts. In the US, women aged between 16-64 make 77% of what men make, Australian women earn 17% less than men and in Sweden the feminist party was so incensed about the gender pay gap that they publicly burned 100,000 Swedish kronor (around £8,500) in protest; a sum which they said represented the amount of money Swedish women miss out on earning every minute in comparison to men. The World Economic Forum also recently released a report criticizing businesses around the world for failing to close the gender gap, with 72% of companies surveyed not attempting to track the salary gap at all.
Many companies offer no salary data because they’d have difficulty in justifying the glaring pay differences that exist between men and women.
But it’s not all bad news. Norway leads the way with getting women into top company jobs following legislation to ensure that 40% of public companies are female and, according to employment lawyer David Willis, there have been positive steps in this country too. He points out that the coalition government has made changes to the way large public limited companies are regulated to encourage the appointment of more women to the boards of directors. Other governments across Europe – notably in Spain, France and Germany – are looking at taking action to speed up the pace of change, too. In fact, Brazil and Mexico are the only countries in the world not to have taken any action to tackle the pay divide.
Still, Britain’s example is not impressive when compared to elsewhere.
Astonishingly, we’re ranked 78th in the world’s pay inequality league, behind countries such as Malawi and Egypt. In Europe, the UK’s pay gap is a third higher than the EU average and is twice that of Ireland. Of the larger member states only Germany has a bigger gap. Despite the fact that it has been exactly 40 years since the Equal Pay Act was introduced in the UK – when the pay gap stood at 34% – there has been no attempt to definitively make salaries transparent so that men and women in the same jobs can know for sure that they are being paid equally.
The secrecy surrounding salaries in this country isn’t just down to our embarrassment: many companies actively discourage employees from talking about their pay, with some going as far as including strict gagging clauses in employment contracts.
This is, without a doubt, one of the key causes of the pay gap issue. There is also currently a glaring lack of legislation demanding that companies report on pay, and in particular, gender pay. With this sort of legislation in place it would be possible to see which businesses are guilty of salary discrimination. But Penny de Valk doesn’t believe this should be necessary: “From a compliance point of view it should simply be normal practice for chief executives to be asking for this information, as they are the role models for integrity and equity in their organisations.”
So why aren’t they? “In some instances there are complex pay structures and they don’t look at them through the filter of gender. In other cases we have to question – do they care? If people are prepared to work for less why would they be prepared to bump up salaries? It just isn’t in their best interests.”
In the run-up to the May election all three parties made the gender pay gap a key focus of their manifestos. They all were clear that the easiest way to end inequality would be to force companies to be completely open about their pay schemes. And word is that from October the Equality Act 2010 will be enforced by the new coalition government. Many believe this will finally outlaw gagging clauses, but employment lawyer David Willis disagrees. “It is true the coalition government has talked about addressing the gender pay gap problem and have suggested various methods, both legislative and nonlegislative to tackle it,” he says. But in his opinion, there is little other good news. “The potential removing of gagging clauses is an important step, but unfortunately the legislation being suggested does not go as far as the Equality And Human Rights Committee would have hoped. For example, the clause is not actually going to be outlawed – it’s more a case of listing situations in which they can and cannot be used in companies.”
Many companies discourage employees from talking about their pay with gagging clauses
The other measure being talked about in the Equality Act is gender pay reporting, in which companies with 250 or more employees will be required to reveal the salary gap between men and women. But according to Willis, even this isn’t a certainty. “This isn’t due to be imposed until 2013, but Labour didn’t categorically promise to bring in this legislation and the Conservatives were against it. It remains to be seen if their views have softened since the formation of the coalition. He adds: “In the meantime, they’re hoping that voluntary measures such as the Equal Pay Audit Toolkit on the Equality And Human Rights Committee website will help in a way that will mean mandatory measures won’t be necessary.”
It’s clear that we can’t rely on government legislation to enforce more transparency in our salaries, which means that the equal pay dream for women is still a long way off – unless we do something about it ourselves. Penny de Valk believes it’s time to stand up for ourselves: “Many women underestimate the monetary value of what they do and when they get a job offer are not as tough at negotiating as men. We need to have more confidence in our value and instead of going into ‘relationship’ mode when an organisation makes a commitment to us, we need to hold out for what we believe we’re worth.”
Patrick Woodman, policy and research manager for the Chartered Management Institute (CMI), agrees. “Our research shows that levels of ambition among female managers are lower than those of their male counterparts. Employers need to start nurturing their female employees. It’s time we made change a reality.”
One thing is clear: simply demanding our colleagues tell us what they earn isn’t necessarily the route to pay equality. “We need to ask if we really want to know what the person sitting next to us is being paid,” says John Lees, author of Take Control Of Your Career. “After all, it might call into question not just your company’s pay structure, but your performance too.”
We need to have more confidence in our value and hold out for what we believe we’re worth.
And what would we do with that information if it was available to us? The late psychologist Frederick Herzberg conducted a study which looked at the factors that bring about job satisfaction and found that pay and status were the overriding influences which determined whether we walk out of work feeling happy. Having access to everyone in the office’s salary package could be the quickest route to regular Monday morning sickies.
“Being underpaid is a well-known demotivator,” says Lees, “but giving people more money doesn’t motivate them either. I think of salary as a way of learning what you want from your job.”
So, in the absence of government measures such as mandatory pay audits, the publishing of data to regulate gender pay gaps and a more comprehensive ban on gagging clauses to stop pay discrepancies from being allowed to continue, it seems that change has to come from us. Because the truth is it’s not about us shouting our salaries from the rooftops. We simply need to know how much we’re worth, not just financially but in terms of respect, responsibility, power and happiness.
To find out if you're being paid enough compared to national averages in your industry, download our chart below.