The gender pay gap can be defined as the percentage difference between men and women's pay. Globally, women are paid 23% less than men. In Europe, women earn on average 14.9% less per hour than men. In Ireland, this figure is slightly lower than the European average - 14.4% in 2021, a decrease of 2.9 percentage points in 14 years! Given the context and societal changes, progress should be made on gender equality as women continue to earn less than men.
In this article, we discuss the importance and specifics of the gender pay gap and offer 5 great ways a company can work to close the gender pay gap and strengthen its culture.
Equal pay means that any work given to men and women must be substantially equal for the "same work" or "work of equal value." Inequalities based solely on gender are not permitted under Irish law. The Equality Act of 2010 states that employers are required to pay men and women the same if the work is the same and/or substantially similar. The gender pay gap is the percentage difference between the average hourly wages of all men and women in a company. This percentage can also be measured by sector and country.
According to the European Institute for Gender Equality, Ireland scores 72.2 out of 100 on overall gender equality. On the 13th of July 2021, Irish Minister O'Gorman introduced gender pay gap reporting as a legal requirement in Ireland; "When it comes to labour market participation, women face far greater barriers than men."
The Gender Pay Gap Act requires employers to provide details of the gender pay gap in their business and identify measures to reduce it.
Measures of the gender pay gap encompass a wide range of inequalities that women face in access to work, career advancement, and pay, such as sectoral segregation, unequal distribution of paid and unpaid work and wage discrimination. Let us remember that women's salaries are as important to household financial health and freedom as men's. Bridging the gender gap fosters a sense of social justice and equal opportunity in society. It reduces the risk of women's impoverishment and improves the quality of child care and health care, as well as overall economic success. Companies that do not address this issue seriously may face consequences in terms of job performance and employee retention.
At Great Place to Work® Ireland, we’ve been studying what makes for fair, great workplaces for women, and our team is lucky to work with companies that are openly acknowledging the issue and doing what they can to address it. Among the survey responses of the Best Workplaces in Ireland to the statement "People are paid fairly for the work they do", the responses from women are still 2 points of a percentage less positive than men.
First and foremost, it's important to understand the extent of the issue. Whether it is confidence in the workplace, racial discrimination, motherhood and work life balance, the glass ceiling theory - it's important to be open to everything and willing to help your employees.
Be aware that small adjustments drive big changes and can help decrease the gap. Start by analysing your compensation reports of all people and all departments. You can compare women and men, but also take into account, gender, sexual orientation, nationalities, etc. This will provide you with a clearer point of view on the situation within your organisation.
Refer to the market wage for specific positions to indicate an appropriate salary for any job you are seeking to fill. Include a clear description of your compensation in your job description and be open to talking with your candidate. This will increase the likelihood that the candidate will be hired fairly. If you find discrepancies in the salary report you analysed, you can address them by focusing on pay equity and closing that pay gap when hiring each employee.
Hire for a diverse and inclusive leadership team where they can work smarter, bringing new perspectives and points of view to challenge the gender pay gap status quo. A homogenous leadership team will be less likely to push for change and create solutions. For example, a millennial or Gen Z person, a single mother, a 50+ person or a disabled person might not all have the same ideas and opinions on salary and compensation.
Approach the problem in a different way. Instead of always having the same people ask for raises and promotions where the least confident get left behind, develop an annual strategy where monthly/yearly promotions go to those who earn them the most. This way, you ensure that you acknowledge your employees' concerns about salaries and promotions in a fair, clear, and structured way. Define what is best not only for your company but more importantly, for your employees. They need to feel that the goal is achievable, that it is fair and accessible to everyone, that they will be rewarded, and that they will be continually motivated to work and stay with the company.
So, you get the picture. But where do you start?
Showing that you care and give back has a very positive impact on the trust, performance and retention of your female employees and employees in general, and strengthens the company culture as a whole. How can you show that you care and support them? Start by listening to them! We can help you create a customised survey for your company's needs. Talk to your employees, gather their feedback and act on it.
More helpful resources to strengthen your organisational culture:
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