Employers who don’t provide gender equality action plans should ‘face consequences’

A new CMI analysis shows slow progress for women to senior management positions.

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Employers who don’t publish action plans for how they will close the gender pay gap should face consequences, according to the Chartered Management Institute (CMI).

Its call comes as new data shows that just three companies in the FTSE 350 index now have no women on their boards – down from 152 in under a decade, but a survey from the Young Women’s Trust shows eight per cent of employers are not paying women who are on the same level as men equivalent pay – a practice that is illegal.

The CMI research, published for International Women’s Day, reveals slow progress in closing the pay gap for female managers with women outnumbering men in entry-level management roles, but still making up just over a quarter of senior managers.

The research with XpertHR shows that female managers in 2018 experienced a mean gender pay gap (GPG) of 23% – around £8,500. The equivalent GPG for female managers in 2017 was 27%.

The CMI says the concentration of women in junior and in lower-paid management roles is likely to be a key driver of the gender pay gap for female managers. The CMI analysis shows that women comprise over a quarter (27%) of the most senior leaders (CEOs, senior directors and directors), but make up nearly two thirds (59%) of managers in entry-level management roles.

It adds that this is not down to a lack of ambition amongst female managers. A recent CMI survey of managers showed that women are hungry for promotion, with 45% of female managers expecting to apply for promotion in 2019.

The CMI is calling for action to redress the gender imbalance and to accelerate work to close the gender pay gap.

CMI CEO, Ann Francke, said: “The latest CMI analysis shows that, despite the rhetoric, the reality is that closing the gender pay gap will take time, hard work and real determination.”

“A key driver for the gender pay gap is the lack of women in senior management and leadership positions. No organisation can be successful in closing their gender pay gap unless they have a plan in place to support more women into senior roles – and a leadership team that is committed to delivering it.”

“Pay transparency is a necessary first step – but we need to see action. This is why CMI is calling on every organisation covered by the gender pay reporting rules to publish an action plan showing how they plan to close their pay gaps.”

“At CMI we support  ‘transparency with teeth’. The UK Corporate Governance Code requires companies to set out their board’s policy on diversity, the measurable objectives in place for implementing the policy, and progress against achieving those objectives. If organisations fail to comply with these requirements, they should face consequences.”

Action, not words

The Young Women’s Trust surveyed 800 HR experts and found 30 per cent said that their organisation had not taken measures to reduce its gender pay gap over the past year, despite the introduction of pay gap reporting. 10 per cent said their organisation did not know how to and does not take it seriously enough.

The Trust is asking employers to say what they pay in job adverts to aid transparency – a proposal that 55% of senior HR professionals think would help to bring about gender equality in the workplace. It also says employers should avoid asking candidates their current salary, which nearly half (47%) of bosses say they still do, and which disadvantages those who are already paid less than they are worth. Positive action measures, including targets to help more young women into male-dominated apprenticeships in industries such as construction and engineering, would also contribute to more equal workplaces.

A report from the OECD also points to the slow pace of change. Its Social Institutions and Gender Index (SIGI) 2019 Global Report says that, despite gender equality reforms in many countries, with innovative rules and regulations in many countries, entrenched social and cultural norms continue to maintain discrimination against women and girls. The report estimates the loss of income worldwide attributable to gender-based discrimination at USD 6 trillion, or 7.5% of global GDP.

A second OECD report, Forward to Gender Equality: Mainstreaming, Implementation and Leadership, finds that in advanced economies, persistent gender stereotypes and bias in policymaking and budget decisions is hampering progress. While women comprise over half of public sector employees, there are still too few women in senior public jobs and decision-making posts, it says, adding that the digital transformation now risks creating new divides.

“Despite a global realisation that women’s equality is an urgent priority, we are moving too slowly in closing gender gaps, and in some countries gender gaps have even widened,” said the OECD’s Chief of Staff, G20 Sherpa and leader on gender issues Gabriela Ramos. “We need to do more and to do it better. We need to be smarter in the way we design and execute policies and be held more accountable on the results; otherwise we may be looking at another 200 years to achieve gender equality.”

The latest update to the OECD’s Gender Portal shows the gender pay gap across OECD countries averages 13.6% with the UK coming in at 16.5%.

Meanwhile bank BNY Mellon is reported to have ditched plans to ban employees from working from home only hours after media reports surfaced that staff were weighing legal action over the bank’s move to axe all homeworking from June. CEO Charles Scharf sent an email to 50,000 employees yesterday morning to say he had “listened and learned” to their concerns. The bank had been warned it would suffer an “exodus” of working parents at its London offices. BNY Mellon had said that bringing an end to a flexible working policy that allows staff to work remotely several days a week will ensure “better collaboration and quicker decision-making.”



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