In the United Kingdom, the mean Gender Pay Gap is around 5.6%, according to figures presented by the Department for Business and Trade. This means an hourly difference in pay of around £1.55. The average working man earns around £29.62 per hour, while the average working woman earns £28.07.
Of course, the picture becomes more complicated when we examine different industries and different seniorities. At the C-suite level, men are much more common: while 45% of seats on FTSE 100 boards are held by women, less than one in ten FTSE100 CEOs are women.
This is thought to be a problem because it’s reflective of a loss of opportunity for women. Women are underrepresented in certain places, broadly speaking, because of systemic disadvantage that ultimately drives down wider productivity. In other words, it’s an ethical problem as well as an economic one.
Technology’s Role in Reducing the Gender Pay Gap
Fortunately, we have a new set of tools that might help to deal with this particular issue once and for all. Let’s consider a few of the more promising ones and how they might help.
AI and Data Analytics
Modern companies now have access to highly detailed databases, which lay out payroll and bonuses in exquisite detail. The data can be sifted through by sophisticated modern AIs, which can inform pay decisions by identifying subtle patterns of gender-related discrimination.
Pay Transparency
In much the same way, it’s now possible for businesses to share the data they’re collecting relating to pay (while preserving the privacy of individual employees). By publishing pay data publicly, they can demonstrate to the wider public (including potential new hires) that the company is holding itself accountable when it comes to pay.
Getting the right pay information might require the input of a specialised accountant. For example, in a medical context, a healthcare accountant might be extremely helpful.
Challenges and Opportunities
So, what might the obstacles be? Well, first, the necessary data-crunching hardware and software will need to be available and practical for HR departments to use. As we’ve mentioned, data privacy is also critical.
If the data paints an unflattering picture of the company, then there may be internal resistance to publishing. However, transparency will often tend to create the right incentives and help to establish trust and credibility that will support the business’s reputation as it does the work of addressing the pay gap.
Future Outlook
So, what does the future hold for the pay gap? The chances are good that it will narrow further. New court decisions might lend greater teeth to the Equality Act, legally mandating equal pay even when the job being performed is not the same. New laws, shifting attitudes among the workforce, and the increasing prevalence of diversity-related thinking at the board level might all help to move the needle.
