What's driving the 2021/22 gender pay gap?
As one gender pay year closes, another begins. 9,908 organisations have reported their gender pay gap details on the Government’s website as of close of the 2021/22 reporting year, which is roughly 93% of all required organisations. The ONS will report later this year on what the latest National and sector pay gaps will be, and will report on the key drivers for the changes.
Research impacting increasing gender pay gaps from YouGov has revealed that men are more likely to ask for a pay rise than women, and are more likely to be successful which is detrimental to efforts to close gender pay gaps. Policies and practices within an organisation, alongside robust pay benchmarking and job evaluation, should be effective in managing out-of-cycle pay increases, but we know how difficult this can be if we risk losing top talent.
The survey from YouGov of more than 16,000 British adults, found that 40% of those surveyed have asked for a pay rise, and just over one quarter of those who asked (26%) had been successful. Half (53%) have never asked, so how is this impacting the gender pay gap?
When breaking these statistics down by gender, the survey saw that women were much less likely to ask for a pay rise than men, with nearly two-thirds of women saying they have never requested a pay rise compared with 48% of men. Of those requesting a pay rise, 46% of men have asked compared with just 33% of women. Just under one third of men (31%) were successful compared with just over one fifth (21%) of women. So with more men asking and being successful, pay gaps are increasing.
So why is it that women are less likely to ask for a pay increase? Is it lack of confidence, fear of rejection, or something else? Jemima Olchawski, chief executive of The Fawcett Society, warned through a People Management news article, that in general women faced “real risks to asking for more money. Evidence shows men working with women who ask [for a pay increase] are more likely to say they are someone they don’t want to work with as a result,” she explained, having seen this when a women has asked for a rise.
By age, the disparity is at its widest for those aged 30 and older, with 31% of men asking for a pay rise and being successful compared with just 19% of women. Olchawski highlights that women often need greater flexibility at work to manage unpaid care meaning that “women feel unable to ask for raises where flexibility is seen as a luxury”. For 18 to 29 year olds, 18% of men and 16% of women asked and were successful, so the younger age groups are more balanced.
Looking by class, the study continues that adults in more middle-class jobs are more likely to have asked for a pay rise and been successful than their those in more working-class jobs, and when adding a gender lens to this, the data shows that the gap is the widest between middle-class men and working-class women in both asking and being successful in asking for a pay increase.
Charles Cotton, senior performance and reward adviser at the CIPD, commented that “employees know why they’re being paid what they are and what needs to happen for them to be able to get a pay rise or promotion". He encouraged employers to be transparent with their employees about how pay is determined and managed.
Pay for a role should be determined using a mixture of market rates and internal pay policies to ensure pay is managed in a transparent, consistent and fair way. Ad hoc pay decisions do not only disrupt gender pay gaps, but can also influence equal pay, increasing costs for the organisation.
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