View from the Street: Gender equality would mind the productivity gap


View from the Street: Gender equality would mind the productivity gap

Two major gender equality stories emerged this week amidst the noise and haste of the Budget. The impact of these stories could be far more substantial and strategically important than any one of the 69 measures the Chancellor announced.

The first was the publication of the Bank of England’s gender pay-gap report, revealing that its female employees earn on average 24 per cent less an hour than their male counterparts. The bank blamed this on the fact that there are fewer women in senior, better paid positions. In more junior roles, they say, the position is reversed.

The Governor, Mark Carney, said: “We’re confident that men and women are paid equally for doing the same job at the Bank; however, the greater proportion of men than women in senior roles is creating a gender pay gap.” No surprise there.

So, there are two elements to the problem, one is the fact that some organisations genuinely pay women less for the same roles. In my experience of life this remains a core risk and problem that, when it emerges through transparency, must be tackled directly by all employers. And if they don’t, then very effective sticks and carrots need to be created by policymakers. It is plainly offensive and when you think through the implications is at least part of the explanation for the UK’s productivity problem.

Some might argue that to fix this element would just involve robbing the Peter (company profits) to pay the Paul (female salaries). That may be true at first glance, and given the overall situation with the stagnant nature of pay levels would still be worth fixing from a macroeconomic perspective. But, at second glance, it would be a strong argument to deploy that properly engaged and rewarded women would make better and more productive employees anyway: it is how incentives, fairness and markets should work.

However, this would not resolve the problem that Carney identified: fewer women in senior positions. How could that be addressed? Behaviourally, it must be the case that women for a variety of cultural or prejudicial reasons are not getting fair access to the career ladder. The push (self-confidence) and pull (male senior attitudes) of that needs addressed actively by us all.

The other big reason, however, must be that women who are mothers, generally, are forced to take much more time from their careers to care for children. Not all, but as a general rule. How all mothers balance their careers and caring is something on which all employers and policymakers should reflect. How single parents manage, doubly so.

My eyes were opened wide by my own experience of becoming a single parent of three children, one with special challenges, just as I started the business. I had the support of great people around me, especially my business partner, colleagues and chairman. But few would be so lucky and it changed so much of me forever - especially my attitude and interest in how everyone else is contending with the challenges we all face in life.

So, how better to give all men an insight, beyond ensuring they go through the shared experiences women can face? Which is what I think made the second major announcement of the week so important: Aviva today has said that it will extend the same paternity leave as maternity leave, which is a huge step forward. Enforcing it to ensure men take it is the next step. But bravo Aviva, bravo!

Only when men have direct experience of what life is like for women will organisations and their leadership move from lip service and tokenism to material change. The Nordic countries appear to be light years ahead of us in this regard. If a family chooses to put the domestic responsibilities on mum because she is in a lesser-paid job, it may be financially understandable but is a big part of the problem. If enlightened decisions like Aviva’s can help break that circuit then change will begin to happen.

Other things being equal, closing the gender pay gap will add to growth and productivity short, medium and long term. We are growing up as a society in real time. Many behaviours are being realised to be unsustainable. This is one in-grained material issue that must be resolved for the good, not just of our culture and civilisation, but in the naked self-interest of our economic performance. It’s time for another step change.