The Gender Pay Gap is the difference between what women are paid, on average, compared to men across all roles. Statistics show that this gap increases most significantly after the age of 40, which can be explained by the “motherhood penalty” - the detrimental impact that taking time out of the workforce to have a child has on a woman’s career. Cultures of presenteeism, a lack of willingness to embrace flexible working, high childcare costs and unconscious bias in recruitment and promotion decisions all present obstacles to female career advancement.

The impact of the Pandemic

It is perhaps unsurprising that the Gender Pay Gap increased during the pandemic. Women were disproportionately impacted with the burden of childcare. Home schooling forced many working mothers to request furlough, reduce hours, take unpaid leave or even leave the workforce completely. High numbers of women were also employed in industries which were hardest hit by the pandemic, such as Leisure, Hospitality and Retail and were therefore more likely to have lost their jobs.

However, the post-pandemic recovery saw many businesses continue to embrace flexible and remote working on a more permanent basis. In theory this should have helped to reduce the Gender Pay Gap. Unfortunately, the latest figures from the ONS reveal that this is not the case and the Gender Pay Gap among full time employees in the UK increased once again this year from 7.7% in 2021 to 8.3% in 2022.

A New Challenge

Whilst there are many positives to flexible working, it also presents new challenges for managers and employees alike. Remote workers will inevitably have fewer opportunities than their office-based colleagues to be “visible” to their managers which, if not managed properly, can lead to “proximity bias” –where the manager gives preferential treatment to those workers in their immediate vicinity. This may well be unintentional on the part of the manager but as women continue to make up the majority of those who work remotely due to childcare commitments, this unconscious bias can impact upon opportunities, career progression and pay for those employees who work flexibly.

Commercial, Reputational and Legal Risks

Failing to proactively manage such situations can lead to resentment between team members, which in turn can negatively impact productivity. Longer term, it can lead to a breakdown of trust and is likely to result in loss of talent and significant commercial, reputational and legal risks. An employee who feels overlooked by their manager in favour of office-based colleagues will leave – which, at best, may lead to a business incurring time, effort and costs in recruiting a replacement and at worst, may lead to grievances and/or the costs of defending claims of sex discrimination.

Any inequality in career progression opportunities will also exacerbate the glass ceiling and perpetuate the gender pay gap. Larger organisations with over 250 employees (which are required to publish this data on their website every year) will be keen to avoid the significant reputational risk a large pay gap entails and businesses of all sizes will be well aware of the importance of diversity and inclusion on the ability to attract and retain clients and staff.

How can businesses mitigate against these risks?

Recognition

The first step is for businesses and managers to recognise that “proximity bias” is an issue. Address the elephant in the room…or virtual room! In hybrid meetings managers must ensure that everyone can participate to their full potential and that the conversation is not dominated by those gathered in the room to the exclusion of those dialling in remotely.

Leaders must ensure that they connect with everyone in their team regardless of physical location. Of course, it is often easier to grab a coffee or lunch with someone who is in the office, but this should not be to the detriment of remote team members. Consider implementing a system where managers record who they have interacted with recently, whether that be an ad-hoc conversation around the coffee machine or a brief teams catch up, so that they can identify any team members who may be falling through the gaps.

Data and Transparency

Data is helpful to keep in check any unconscious bias and mitigate any legal risk. This may be as simple as keeping a log of which projects, clients or responsibilities are being given to which individuals in the team or putting in place an objective system for allocation of work. The data will help to highlight any areas of concern.

Career progression criteria should be clear, transparent, regularly reviewed and clearly communicated to all employees.

Businesses should undertake an analysis of pay data, even if they are not required to do so. This will help to ensure that any disparities are identified as early as possible, and steps can be taken to address the root cause. With ever increasing regulation and legislation relating to Diversity and Inclusion, it is essential that organisations are pro-active rather than reactive, regardless of their size.

Manager Training

Organisations should invest in inclusive leadership and management training. This will help to educate and equip managers in managing hybrid teams and support the creation of an inclusive culture. This investment will ultimately reap rewards in both the reduced risks and the increased productivity that valued, engaged diverse teams bring to the workplace.

How we can help

We can assist your business with all of its Diversity and Inclusion requirements - from analysing data and preparing your organisation’s Gender Pay Gap Report - to working with you to develop a Diversity and Inclusion strategy which identifies and addresses any areas for improvement. Our experienced team members also regularly provide manager training on Equality and Diversity and Inclusive Leadership.