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PwC talk about closing the gender pay-gap

Category: Employer Focus

three diverse women standing in line

In the recent PwC economics podcast, Hannah Audino, an economist at PwC is joined by colleagues Jing Teow and Shivangi Jain to talk about gender equality. During the podcast, they speak about gender equality within the workplace and the economic benefits of closing the gender pay-gap.

This year’s International Women’s Day (8th March 2017) was themed “be bold for change”, encouraging individuals and organisations to actively encourage and support gender equality in all aspects of life. PwC is committed to helping achieve gender equality, not only in the workplace but also in the industry and wider society. During the podcast, they speak about the Women in Work Index and how this highlights the issues that exist surrounding gender equality in the workplace and how this can change.

The 2017 Women in Work Index is the latest measure of gender equality in the workplace and it combines five indicators of female economic empowerment, such as participating in the workforce and the gender pay gap, amongst other things. These indicators are then combined into a single index comprising of 33 Organisation for Economic Co-operation and Development (OECD) countries, allowing individuals to see how well each country is doing in this respect, compared to another.

The index shows that the OECD has continued its gradual progress towards greater female economic empowerment; however, there is still a significant way to go in order to achieve gender-equality. This year’s top three spots were taken by Iceland, Sweden and Norway; however, the UK was no-where to be seen in the top three, or even the top ten. Currently the UK stands at number 13 in the index, moving up one position from last year; showing the slight improvement that the UK has made in the last year.

The improvement that the UK has made is due to improved economic conditions, which have led to greater employment prospects for both men and women. However, the UK pay gap is slightly higher (17%) than the 16% average across the OECD; highlighting that the UK has plenty of room for improvement. If the OECD continues to progress at the rate that it has previously then it could take nearly a century in order to close the pay gap completely, while the UK has the ability to close the pay gap in 25 years due to the faster progress that they are making.

There is a common issue for women who take time out of work in order to care for their children, as they are more likely to lose out from pay progression during the time that they are away from work, therefore contributing further to the pay gap. This is due to their working progress being put on hold until they return to work. Women can also face barriers when returning to work after, as they can struggle to get back into a role that aligns with their skills or prior experience. It is also more common for women to work in lower paying sectors and occupations. There are many women who would like to achieve more in their careers, however, they can find themselves held-back by a lack of opportunity and flexibility.

Jing spoke about a recent study that she had conducted around the employment prospects of women returning to work after taking a break in their career. The study found that up-to two thirds of highly skilled professional women such as doctors, lawyers and engineers returned to work in a lower skilled role or were working less hours than they would have liked to; highlighting the scale of this issue. Many of the women who had suffered when they returned to work had the skills to work in higher roles, however, were being under-utilized as a result of taking a career break.

This is a real issue for not only the women who are affected, but also to the businesses who are not making the most of skilled and willing to work employees. For example, a CBI survey found that two-thirds of businesses are worried about shortages of highly skilled workers, however, they are not utilizing the women who have the skills to fill these roles successfully. Shivangi speaks about how, by completely closing the pay gap across the OECD, female earnings could rise by almost US$2 trillion and the UK could gain almost £85 billion.

The top performers in the 2017 Women in Work Index, such as Iceland and Sweden are successful in reducing the gender pay gap by encouraging both parents to take time off work after having a child through systems such as ‘use it or lose it’ quotas. This means that they give each parent a non-transferable quota of time off to use for themselves, if the individual parents do not take this leave then they will lose it, therefore encouraging more fathers to take their full paternity leave.

This differs from the UK, as the UK government has introduced shared parental leave, which means that parents can decide for themselves how they would like to share the leave from work after they have a child; often the woman is the one to take more time off work and, therefore, face greater barriers when returning to work. In addition to this, women also often require greater flexibility when returning to work, due to childcare commitments, therefore limiting their options.

Many people, especially mothers, have to consider childcare costs when returning to work; it has been found that families in the UK spend around a third of their income on childcare, however, in the Nordic countries it is less than 10%, meaning that more women are able to return to work without having to consider the economic effect. If the UK were to make childcare more widely affordable, the economy could benefit from a greater number of skilled female workers returning to full-time work earlier, therefore benefitting the UK OECD index.

There is plenty that UK business can do in order to help to level the playing field, for example, by offering flexible working policies, especially for more senior positions, more women will be able to fit childcare responsibilities around their work. A salary rate by Timewise recently showed that only 6% of roles with an advertised salary of over £20,000 are available on a flexible basis in the UK. Therefore, meaning that the figure for roles with six figure salaries falls to 2%.

In addition to this, businesses could also benefit from a cultural change surrounding performance and how it is assessed and rewarded. For example, individual performance is commonly measured based on the number of working hours that are spent in the office. However, if this model were to change to one that allows employees performance to be based on the outcome of their work, this would allow employees to work remotely and flexibly, therefore fitting around their other responsibilities.

Retention programmes are another way of encouraging both men and women back to work after a career break by offering coaching support and networking opportunities.

If you’d like to read more please head to pwc.co.uk/womeninwork

Are you interested in a career with PwC? Please click here.

VERCIDA works with over one hundred clients who are committed to creating an inclusive work environment. If you are an employer and interested in working with VERCIDA to promote your diversity and inclusion initiatives and attract the best candidates, please call 02037405973 or email [email protected] for more information.

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VERCIDA works with over one hundred clients who are committed to creating an inclusive work environment. If you are an employer and interested in working with VERCIDA to promote your diversity and inclusion initiatives and attract the best candidates, please email [email protected] for more information.

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