The Gender Pay Gap and Filling the ‘Ask Gap’
2nd August 2023
The gender pay gap refers to the difference in average earnings between men and women in the workforce. It is a complex issue that has been observed in many countries and across various industries. The gender pay gap is usually expressed as a percentage, representing the difference between the average earnings of all men and women who work.
To address the gender pay gap, the UK government have taken various measures and initiatives to promote gender equality in the workplace. These efforts included promoting pay transparency, requiring companies to publish gender pay gap data, encouraging equal pay policies, and providing support for work-life balance through parental leave and flexible work arrangements.
But four out of five companies and organisations in Great Britain still pay their male employees more than female ones, according to a recent analysis of the government’s gender pay gap reporting. The median pay gap remains stubbornly wide at 9.4% in 2023 – the same level as in 2017-18, when employers were first required to publish the information.
Several factors contribute to the gender pay gap:
- Occupational segregation: Women and men tend to work in different industries and occupations, with some sectors historically paying less than others.
- Differences in career choices: Women may be more likely to pursue careers in fields that typically offer lower salaries, while men may dominate higher-paying professions.
- Motherhood penalty: Women often face interruptions in their careers due to maternity leave or taking on caregiving responsibilities, which can impact their earnings and career progression.
- Unconscious bias: Gender stereotypes and biases can influence hiring, promotion decisions, and salary negotiations.
- Lack of representation in leadership positions: Women are often underrepresented in top leadership roles that come with higher compensation.
- Negotiation disparities: Research suggests that women may be less likely to negotiate their salaries compared to men, which can contribute to differences in pay.
It is essential to distinguish between the adjusted gender pay gap and the unadjusted gender pay gap. The unadjusted pay gap simply compares the average earnings of all men and women, without considering factors like occupation, education, or experience. The adjusted pay gap takes into account these factors to provide a more accurate comparison of earnings between men and women in similar roles.
Addressing the gender pay gap requires a combination of strategies at the individual, organizational, and societal levels. Some of these strategies include:
- Promoting pay transparency: Encouraging companies to be open about their pay scales can help identify and address any disparities.
- Implementing equal pay policies: Ensuring that men and women receive equal pay for equal work is crucial in bridging the gap.
- Supporting work-life balance: Offering flexible work arrangements and parental leave policies can help reduce the motherhood penalty.
- Providing mentorship and career development opportunities: Encouraging women to advance in their careers can help close the gender pay gap in leadership positions.
- Promoting diversity and inclusion: Creating an inclusive work environment can help mitigate biases and discrimination that contribute to pay disparities.
- Advocating for policy changes: Governments can play a role in addressing the gender pay gap through legislation and initiatives that promote gender equality.
What is the ‘ask gap’?
Research shows that the pay gap, partly stems from the ‘ask gap’: the difference in salary expectations between groups, which undercuts women and minorities in particular. Closing this ‘ask gap’ can pay major dividends for careers, reducing long-term salary inequality. Some researchers have estimated that a difference of £1,000 in starting salary could lead to a cumulative loss of a half-million pounds.
Ask gaps have many culprits, but key among them is the devaluation of women relative to men. Often people internalise these expectations. It can be harder for women to accurately assess their value. This might lead women to accepting the first job or salary offer, while men are more likely to wait for higher offers to land.
Women may be apprehensive about coming across as greedy or pushy in negotiations, or about hiring managers withdrawing or lowballing offers. In contrast, in general, men don’t put much thought into these things; men are also more likely to have inflated perceptions of their value. Men are more comfortable asking, and they don’t need to worry about experiencing backlash.
The double backlash means that it can be hard for women to ‘win’ at negotiating, no matter which tack they take. If they’re too forceful or masculine, there’s a negative perception that they’re not collaborative, they’re not cooperative… But if they’re too nice and they’re collaborative or communal, then they’re perceived to be weak, or maybe not as competent.
Women are not inherently or universally softer negotiators. For instance, there’s plenty of research showing that women have been successful if they have been negotiating on behalf of someone else. In other words, women are either more comfortable, or viewed more favourably, when they’re not negotiating for themselves – partly because of societal expectations that they be ‘nice’.
More wage information is necessary, especially for people starting out in their careers. But it’s not sufficient for closing ask gaps. What’s needed first is awareness of disparities in ask gaps – and what perpetuates them.
Companies or governments can end the practice of basing salary offers on people’s previous salaries. Women are coming in with a history of lower salaries usually. And so, this provides firms with an anchor for women that’s lower than the anchor for men for a given role. And so that essentially perpetuates the gender gap. In the US, where certain States have banned salary history questions, there’s evidence that this has helped reduce both the gender pay gap and the minority pay gap.
Negotiation training could also help, but it would need to be more nuanced and culturally specific. Existing trainings on negotiation tend to look at it from more of a universal perspective. And often, the recommendations of behaviour or the prescribed strategies and approaches are very broad, and there isn’t much consideration for the subsets of these demographic groups and how they themselves react, or how their opponents might react to them. Plus, such training puts the onus to change on women, rather than the system stacked against them.
In general, one common suggestion is to foster networking and mentorship. Yet although that’s very helpful for nurturing underrepresented leaders, it can have a detrimental effect on salaries. That’s because women take their cues about reasonable salaries from each other, they’re hearing of lower salaries than what men earn (and tell each other about). So men also need to be involved in this process. By openly sharing their salaries with women who are trying to progress, can make such a difference.
Closing the gender pay gap is not only a matter of fairness but also contributes to better economic growth and productivity. Efforts to reduce the gap require the collaboration of individuals, employers, policymakers, and society as a whole, which echoes the mission of Karren Brady’s Women in Business & Tech Expo.
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