CBI seeks target to reduce gender pay gap

Generic Women in Work

The next government should set a national target for reducing the pay gap between men and women, the UK’s largest business lobby group will urge today.

Katja Hall, the CBI’s first female deputy director-general, said it was time to “shine a light” on the gap of nearly 20 per cent between male and female earnings, in the same way that a review by Lord Davies has tackled the shortage of women on company boards.

Reaching the target would require progress in areas that have a real impact on equal pay, such as improving careers guidance in schools, a better understanding of the benefits of flexible working for parents and businesses, and affordable childcare, she told the Financial Times.

“Gender should not define what people earn, and we need to put equal pay firmly into the spotlight,” Ms Hall will say in a speech at the First Women Awards in London today.

“Currently, too many areas of work – often those with high pay potential – are seen as male-dominated, with women steered away from options that would give them better access to higher pay and seniority.”

While the full-time pay gap for women under 40 is now close to zero, the overall gap in median gross hourly earnings excluding overtime was stuck last year at 19.7 per cent.

The gap for full-timers was 10 per cent, up from 9.5 per cent in 2012, after shrinking gradually from about 17 per cent in 1997.

Women have a low share of high-paying jobs in areas such as engineering and technology and are highly concentrated in public sector areas such as health and education.

Ms Hall envisages the target being set by a committee chaired by a business figure, in a similar way that the Davies committee’s target of having 25 per cent women on FTSE boards has spurred an increase to 20.7 per cent from 12.5 per cent in 2011.

The CBI favours a voluntary approach rather than “bureaucratic” measures such as mandatory equal pay audits or company pay gap reporting.

In a policy paper, the CBI will urge the next government to increase the provision of free childcare, when affordable, and create a system to support employer engagement in careers services.

It will call on companies to commit to meaningful diversity policies and show greater openness to job-sharing in senior roles.

The CBI wants every sixth form, college and university to set targets for female participation in subjects such as physics.




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