Entrepreneurs and the Gender Pay Gap

Debate over how to resolve the gender pay gap has been rumbling on for years, yet today, men in full time employment are still paid, on average, 9% more than women, according to the Office of National Statistics. 

Despite the salary difference among workers under the age at 40 being almost at zero, and last year the gap falling in seven of the nine main occupational groups, there are several underlying issues that continue to slow progress in closing the gap.

Most notable is the fact that, despite the fall in several categories, the gap continues to rise at boardroom level. In 2019, the difference in pay among men and women in managerial, director and senior official roles actually increasedby 2% to 15.9%. A step in the wrong direction.

In fact, the top 10% highest paid women earn a fifth less per hour than the highest paid men in the UK. To put it into perspective, that means that men in the boardroom are paid for an additional two and a half months’ work over their female colleagues in the same roles.  

In addition, while the gap edges closer to zero among the younger generations, there is a substantial shift among the over 40’s. This is because many women have left work, either full time or part time, to start a family. The gender divide starts to creep open.  

The Pay Gap Silver Lining

Despite the negative shift among boardroom level roles and for those returning to work after starting a family, there is a silver lining. The number of female entrepreneurs is on the rise in the UK, according to research from Aston University using data from the Global Entrepreneurship Monitor (GEM).

The gender gap, it seems, has inspired a new wave of female entrepreneurs who are breaking out from the traditional business hierarchy and starting up their own businesses. Never mind the glass ceiling; they have created their own boardroom. 

While many of these businesses may not yet be employing over 250 members of staff, it’s never too early to start thinking about creating a positive culture of gender equality.  

Since co-founding Origin in 2002, a business that is now the UK’s leading manufacturer of windows and doors, gender equality has always been high on the agenda. Despite rapid expansion, we have retained strong family values, particularly within our internal employee culture. In fact, at Origin, women are paid 5% more than men. This is based purely on performance, rather than gender. 

The following advice has always helped guide our decision making on gender equality. 

1. Be Open About Processes 

Be open about processes, policies and criteria for hiring and promotion. Decisions are then always based on objectives and evidence, rather than gender bias. 

Appoint a Diversity Manager within the business who has access to all HR data, can query all decisions to remove inequality, and is given the freedom to develop and implement strategies for a more diverse workforce within the business. 

2. Don’t Try Too Hard to Break the Glass Ceiling  

While Government guidelines suggest ‘making sure more than one woman is included when putting together a shortlist of qualified candidates’, I have to disagree. It’s wrong to try and shift the balance of men and women in senior leadership roles by giving someone an advantage simply because they’re a woman.

It’s understandable that most businesses have fewer women in the boardroom. After all, by nature women are the primary care givers, so are more likely than their male counterparts to take time away to focus on family life at a time when their experience allows them to enter the boardroom. 

Don’t feel that you need to demonstrate the absence of the glass ceiling by consciously including more women in the shortlist. This only belittles the work that women do and sways inequality in the other direction. Men and women should be recognised and rewarded based on merit alone. At Origin, a fifth of our senior team is female, and that’s OK.

3. Support Family Life

Supporting women returning to work - and being flexible on those who only want to return part time - is an important part of any gender equality policy. This will benefit your business by forming strong loyalty among employees, and building a much happier, more fulfilled workforce.

As a family business, Origin works hard to create a culture of inclusivity, family, kindness and trust. It’s at the heart of everything we do. 

In Conclusion

Despite the negative press, the gender pay gap continues to encourage an increasing number of women to set up their own businesses. It’s a step in the right direction, but the new wave of female entrepreneurs need to remain conscious that they are now the driving force for change. Only then will we be able to close the gap for complete gender equality in the workplace.