CELEBRATIONS OF INTERNATIONAL EQUAL PAY DAY, 18TH SEPTEMBER 2020
Agnieszka Zając, Managing Partner Odgers Berndtson Luxembourg. Member of the Supervisory Board of Amnesty International in Luxembourg.
Celebrations of International Equal Pay Day, 18 th September 2020
Let’s speak about the diversity, and the gender gap particulary. I will share with you some facts, professional findings, and personal experiences in this article. In addition, I will try to emphasise some positive changes which, in my opinion, might happen in the topic nowdays. And this, despite a pretty sad vision due to the pandemic.
What exactly the gender pay gap means and what’s the actual situation?
The gender pay gap is a persistent concern in Europe, and in the world, where women make about around 85% of what men make for comparable work. The numbers in some countries are more extreme (like in Estonia where it is 73%! ), and they range widely from country to country worldwide. Although the existence of the pay gap is indisputable, many still try to discount it or attribute the entire gap to “women’s choices.”, following Forbes. And, we used to hear people say that the gender pay gap is a myth and does not exist. In reality, the pay gap does exist but is deeply complicated and has a host of contributing factors. Although “equal pay for equal work” sounds fairly simple, it is not.
The unadjusted gender pay gap is defined, based on Eurostat, as the difference between the average gross hourly earnings of men and women expressed as a percentage of the average gross hourly earnings of men. It takes into account three types of disadvantages women face:
- lower hourly earnings;
- working fewer hours in paid jobs; and
- lower employment rates (for example when interrupting a career to take care of children or relatives).
I would like to invite you to consult an overview of gender pay gap (GPG) statistics, given by Eurostat (data from February 2020):
The pourcentage varies country by country. However, following the study made by European Commission (the latest one I have found about this topic was published in 2017 – food for thoughts). “women in the EU earn on average 16% less per hour than men”. In addition, this study highlights that « the gender pay gap in the EU stands at 16% and has only changed minimally over the last decade ». If you wish to have a deeper look on the gender pay gap worldwide, I would highly recommend to consult the latest OECD gender wage gap studies – link below:
As you can see, Korea appears as a kind of worldwide champion of the gender wage gap!
Anyway, what’s behind?
When discussing the origins of the wage gap, it is important to consider an interconnected web of related factors which could be grouped into three categories: individual, organizational and societal. Within all these categories, it’s crucial to not forget the impact of unconscious bias, discrimination, plain-old sexism and the differences that exist by race, ethnicity, religion, class, sexual orientation, ability and other demographic groupings. Hence, understanding the reasons why the gender pay gap exist remains pretty complexe, a kind of castle of Kafka, in my opinion.
Part of the reason “why” for the gender pay gap is that women are more likely to take a break during their careers to have children or to seek lower paid positions that offer more flexibility to make it easier to manage a family. Some people mistakenly assume that this “explains” the gender wage gap and eases fears over sexism. However, this explanation does not fully account for the gap. Neither do differences in education, experience, and occupation. It also doesn’t negate sexism in the workplace.
Factors that are likely to impact the gender pay gap but are difficult to measure might also include unconscious bias and discrimination against women, including assumptions that women will leave the workforce to have children or that women with children should earn less than men. Based on the Pew Research Center survey, « 42 percent of women said they have experienced gender discrimination at work compared to 20 percent of men who said the same”. One of the most commonly reported forms of discrimination is earning inequality. Indeed, « 25 percent of women said that they have earned less than a man doing the same job while just 5 percent of men said they have earned less than a woman doing the same job ». Women with children also make less than men with children or women without children. This is often called « the motherhood penalty » or the « childbearing penalty ».
The research also shows that women occupy more lower paying positions than men. Although women have increased representation in higher paying jobs today than they did when the Equal Pay Act was signed over 50 years ago in the United States, women as a whole are still underrepresented in high paying jobs and leadership roles, especially in the C-Suite. The #MeToo movement of 2018, which began as an outing of sexual harassment and sexual assault, encompassed this issue. Following the European Commission study mentioned below, « still less than 10% of top companies’ CEOs are women ». In addition, « the profession with the largest differences in hourly earnings in the EU were managers: 23 % lower earnings for women than for men ». So, in resume, the world still has a clear issue in paying the same salaries to men and women, for the same responsibilities. And I guess every women reading this acticle has already experienced this situation. Haven’t you?
Does the situation change?
Based on our global executive search experiences, similar differences also permeated executive search. For global roles requiring significant travel, the assumption would be that women were less likely to want those roles or be less suitable. Because they would have caring responsibilities.
“I think clients often saw the appointment of women in certain roles as too risky, which reduced the talent pool. Thankfully, there were brave voices out there where this was challenged. But these assumptions reduced the number of women who were promoted, and I think women were often overlooked on appointments » says one of Odgers Berndtson’s partners, in charge of the diversity topic across different practices. “And let’s not get too complacent, imagining that everything has changed over the past 20 years. It hasn’t » – she adds.
So, does it mean that there is no chance to progress on the question? May the actual crisis have a positive impact on the situation ?
The coronavirus pandemic of 2020 has forced a large portion of the population to work remotely, with layoffs on the horizon for some occupations and industries. Women might have a higher risk of suffering greater penalties in earnings as they make up a larger percentage of occupations in Community & Social Services, Education, Library & Training, Office & Administrative Support, and Personal Care & Services, which are more likely to be suspended, laid off, or forced to work reduced hours. Women are also more likely to have to take time off work, or even resign their positions, in order to care for children who are no longer in school as well as other family members. Inevitably, a care crisis will arrive, with elderly people competing with children for a larger share of care, attention and spending. That being said, the Covid-19 scenario is giving us a preview of what that future will be like, which could put gender equal pay battle on hold for a decade, as many warn. So, the progress seem to be put on hold…
However, there is perhaps a chance for change. As the new normal is knocking the door, changing everything around, and as Winston Churchill said one day: “We are not allowed to waste this crisis”, we can perhaps make some small steps ahead. With the right attitude to perceiving this crisis as an opportunity, not a danger.
Our firm has done a lot of work across different sectors so far, to measure the level of best practices in the field of diversity, in general. Firms used to say: ‘we recruit really brilliant female graduates. They come in and get to a certain level, but because somebody is needed to be dedicated to clients – which means travel, being available, driving the business relationships out of core hours – we lose these women. Or the women who come back to work after career breaks, come back at a lower level role.’ This is insanity. However, as Covid-19 has brought the new normal to companies and global business travel has largely ground to a halt during the pandemic – experts have even been raising the alarm that this is the death of business travel as we know it – businesses need to reinvent itself, with perhaps a larger participation of women at the positions initially reserved to men as the initial show stoppers have become common? Why not! It’s just one idea about a new peception of certain “egality” between man and woman. Technological changes could help too: global digitalisation, work from home, a tremendous increase of on-line courses, flexible hours,.. This new reality will certainly give a chance to any women staying home to gain new competencies, and to excell equally, or even better, than men. Why not again! The way to decrease the pay gap is of course far to be done. However, some new practices can perhaps open a frame for improvement. Millennials might also accelerate the drive towards greater diversity because they are impatient for greater flexibility and more options in their working lives. Young men seem to want greater flexibility and control over their lives and will recognise they need gender equality to have that. Will they be happy to be supervised by a women? That’s another question but, honestly speaking, the education given by theirs mothers will certainly help change the perception.
Here are just some ideas. Some countries also keep on promoting the quotas for the number of women on the top level and Board positions. Even if I am not personaly enthusiastic about this approach, I need to admit that there is a window for change – more women on the top positions, more noise about egality and gender pay gap around. In these uncertain times, the one thing to be certain is the need for companies across every industry to rethink how they function. Thus, there is perhaps a chance to accelate the debate about diversity, gender pay gap included. Not just across the HR community, but amongst all business leaders. Chairmen and chief executives talk about this already – no longer as just a policy or process, but as an integral part of the success of a business.
Does it speak to you? What are the necessary solutions for leaders in government and business to champion? How can we effectively collaborate to develop a healthier, caring, and more equitable economy? Please share with us your thoughts or findings on the subject. Whether you focus on labour policies, business leadership, workers’ rights or open government data, you are likely to encounter similar challenges and can share lessons from efforts to better understand and reduce gender pay gaps.