The UK is not making progress fast enough to improve female economic empowerment in the workplace, particularly with regard to the gender pay gap, and has been outpaced by other countries, according to research by Pwc.
It says lack of flexible jobs at a senior level is partly to blame. Pwc’s latest Women in Work Index finds the UK has fallen slightly from 14th to 15th place in a ranking of 33 OECD countries based on five key indicators of female economic empowerment. Although labour market conditions for women improved in the UK, other OECD countries such as Poland, which made significant gains in reducing female unemployment, improved more.
However, the report shows that, since 2000, the UK’s position has improved from 17th place and it compares well to other G7 economies, being second only to Canada. The Nordic countries continue to lead the Index – with Iceland, Sweden and Norway rated as the top three countries for opportunities for women in the workplace.
Advances in closing the gender pay gap varies across UK regions. Northern Ireland has led the way in closing its gender pay gap since 2000, reducing it from 22% to 6%, the lowest in the country. This has been driven by the share of women working in public administration, a sector with relatively high pay and a relatively low pay gap.
In contrast, London has made the slowest progress, only managing a 3% reduction in its pay gap from 22% in 2000 to 19% in 2017. The capital’s pay gap increased in 2017, up from 17% in 2016 due to a rise in the gender pay gap in low paying sectors in the region, the report shows.
The research found that financial services and agriculture and forestry sectors have seen the biggest improvements in their gender pay gap over the past year, although financial services still has the highest overall gap. The pay gap has increased in accommodation and food services, administrative and support services, mining and education sectors.
Yong Jing Teow, economist at PwC, said: “Disparities in average pay for men and women exist across all regions of the UK. While great progress is being made in some areas, sustained business action is needed to ensure that these gains continue. We need to ensure we’re implementing long-term solutions, not just quick fixes, to close the pay gap for good.”
PwC economists identified the underlying common key drivers of the gender pay gap across all OECD countries. The results show larger government spending on family benefits significantly pushes down the gender pay gap, which suggests that greater availability of affordable childcare could improve female participation in the workforce by helping parents, especially mothers, return to work.
The report shows countries with a larger share of employers who are female also tend to have smaller pay gaps, which it says suggests that having more female entrepreneurs and women in decision-making positions increases the likelihood of promoting gender equality policies. It adds that this suggests more support to promote female entrepreneurship, such as improving access to finance for female-run businesses, mentoring programmes etc. could help foster gender equality, with positive impacts on the pay gap.
The research shows that a one percentage point increase in the proportion of female business owners, with more than one employee, is associated with a .53 percentage point decline in the gender pay gap.
The occupational segregation of women, particularly in low-paid services sectors, is also associated with higher pay gaps. Many women often have to combine work with ongoing caring commitments, which necessitates part-time or flexible working. However, their opportunities are constrained by the lack of flexible or part-time roles available for senior and higher-skilled jobs, which exacerbates the pay gap, says the report. The report calls on businesses to make flexible work opportunities more widely available and take active steps to build a pipeline of female leaders.
Laura Hinton, executive board member and head of people at PwC, said: “Action needs to focus on bringing more women through to higher-paying and higher-skilled roles, such as those in the technology sector, providing greater flexibility so that part-time working isn’t the default option and encouraging more men to take up shared parental leave so that it’s not always women who take extended breaks from the workplace. The success of these business-led actions could be enhanced by policy levers that support women to have a greater participation in the workforce – such as shared parental leave incentives and better availability of affordable childcare.”