In recent years, there are have been a number of reports regarding the gender pay gap. It’s a topic that can have a big impact on your business, both in terms of your employee relations and when interacting with other stakeholders. Business owners can benefit a lot from taking time to analyze what causes a gender pay gap, or GPR, and finding the best ways to communicate with staff to address the problem. Here’s what you need to know about the gender pay gap and the ways it can impact businesses.
What is the Gender Pay Gap?
Gender pay equity is vital for society to flourish but numerous studies have shown that the global pay gap is moving at an incredibly slow pace. In fact, the World Economic Forum suggests that it will take 202 years to close, based on the size of the gap and the pace at which it’s changing. Women are paid an average of 63% less than men on a global scale for similar or equal roles. However, women make up around half of the working potential around the world and they contribute a considerable amount to the economy. Therefore, the participation of women is a benefit to the communities where they live and the wider world, not just the businesses where they work.
How are Businesses Affected?
Businesses have to understand the causes of gender pay gaps in order to address them. Global HR teams have to deal with a lot of complex factors when establishing communication processes and initiating changes within the business to reduce imbalances between male and female workers. Studies suggest that companies that prioritize gender pay equality have a higher level of performance from staff. What’s more, the organizations that put a spotlight on the gender pay gap have better employee turnover rates.
80% of women reportedly would switch to an employer they felt provided greater gender equality if they had the opportunity and 49% would leave their current position if they learned that a male colleague earned more in the same position. Equality is also an important factor in over three-quarters of men and women. Such statistics show that a workplace where everyone is treated fairly and equally makes for more engaging workplace culture. A business that lacks equality among its workforce will experience a disconnect between employees. HR teams are always seeking ways to improve engagement and retention within teams, and pay could be a key motivator for employees.
Gender pay equity contributes to a business’ bottom line. When staff feels that they are being rewarded equally and to an appropriate standard, they are far more productive, motivated and engaged than those who feel they are being treated unfairly. This results in higher retention rates, the opportunity to attract the top talent in the industry and create a more satisfied workforce for companies that put equality at the forefront of their business strategies. The financial returns could be far less for businesses who ignore the issue.