Before April next year, organisations employing over 250 people in the UK will have to provide data about their gender pay gap. The legislation will affect around 9,000 companies employing more than 15 million people. It’s hoped that this strategy will force companies to take measures to eliminate the gender pay gap, estimated at 18.1%. The Government argues this could add £150 billion to annual GDP by 2025 and according to the minister for women and equalities, Justine Greening:
Helping women to reach their full potential isn’t only the right thing to do – it makes good economic sense and is good for British business.”
Yet many organisations are not equipped to deliver this data. A recent survey of 145 employers by TotalJobs revealed that a clear majority do not currently review their gender equality and equal pay policies and over half do not have complete salary information across roles and gender.
This doesn’t surprise us. Three years ago, when we founded The Glass Lift, we knew that there was much work to do to increase gender equality and the number of women in leadership. In parallel was a recognition that this was also the case for people from black, ethnic and other under-represented groups. Our leadership development programme for women, ELEVATE, made a statement about the need to accelerate women’s careers.
Since then many organisations have publicly committed to addressing the imbalance. We have seen the introduction of shared parental leave and changes to recruitment and promotion processes to limit gender bias. Yet to date the results have been marginal. According to McKinsey Quarterly (February 2017):
More than 75% of CEOs include gender equality in their top ten business priorities, but gender outcomes across the largest companies are not changing…”
“Over 90 percent of companies report using clear, objective criteria for hiring and promotions, yet only about half of women believe they have equal opportunities for growth at their companies.”
The evidence is in the numbers:
Of the 92 FTSE 100 companies that responded to the research, only 18.7% of Executive Committee members are women.*”
In fact, the proportion of women in senior leadership fell in 2016.
So why has progress been so slow?
We believe that many senior leaders do not yet have an in depth understanding of the strategic importance of gender balance to organisational productivity and clarity on how to drive change. The new gender pay gap reporting requirements present an opportunity to accelerate progress. This will not only expose discrepancies between what men and women earn, but also bring gender equality into sharp focus. We believe effective and inclusive leadership is the first step to not only closing the gender pay gap, but moving towards gender balanced leadership.
The new gender pay gap reporting requirements present an opportunity to accelerate progress.
Leaders are made and not born and effective leadership comes in many forms. Balanced senior teams of people with diverse backgrounds, perspectives, attributes and styles brings a whole new dimension to leadership. When you put that mix together there is potential for a great recipe: better organisational performance. But it takes courage, time and focus to build a great diverse and inclusive leadership team and as we all feel, sometimes it’s easier to stick with what you know.
Building this type of leadership capability requires an innovative approach to leadership development. Yes, certain attributes are needed to lead: intelligence, learning agility, willingness to engage with your people. But the reality is that becoming an effective leader is a trial and error process that takes place in the workplace and it requires a certain attitude – an openness to personal development. The role of leadership development is not to teach, but to guide and in our view, the most important leadership behaviour to guide is inclusion, because this has the potential to maximise human resources. This will bring the change towards gender balance at senior level and this is step one towards closing the gender pay gap.
Psychologists are still researching exactly what we mean by ‘inclusive leadership’. We see this as the ability to authentically value and respect all individuals for their talents and contributions and to create a Psychologically safe climate for all people at work. Leadership that creates an environment where our basic human needs at work are met: a sense of control over our work, positive relationships with those that we work with, a sense that we fit in and some satisfaction in what we do. This is what drives performance.
To make progress towards closing the gender pay gap we need to guide all aspiring leaders to practice effective and inclusive leadership.
Behaving inclusively all the time is tricky. Our brains are programmed to make short cuts and we are unconsciously drawn to people we perceive to be like us. Consequently, increasing gender balance in leadership takes conscious behaviour change by leaders. If we are to make considerable progress towards closing the gender pay gap and enabling gender balanced leadership we need to guide all aspiring leaders to practice effective and inclusive leadership.
So, now is the time for a different sort of leadership development that does two things: Firstly, opens leaders’ minds to being consciously inclusive and secondly guides behaviour that creates a Psychologically safe climate for all people at work. Only this will enable all people to make a full contribution to their organisation, irrespective of their gender, ethnicity, sexuality, age or disability.
If we get that right, we might just start to build some momentum towards closing the gender pay gap, balancing leadership and realising the potential to gain the projected £150 billion to annual GDP. In a post-Brexit World, we certainly need that.
Views from The Glass Lift by Margaret Davies, Occupational Psychologist and Director, The Glass Lift
To find out more about #ClosingTheGenderPayGap and how The Glass Lift can help your organisation, join our Masterclass: 6th July in London.
Further Masterclass dates and locations available, or can be run as an internal session for you and your staff – contact us for more information.