Recent research [PDF] from Xactly found that 62% of UK business executives believe a pay gap exists because 'women take time out of their careers to have children and struggle to catch-up with male counterparts on return'. Tom Castley, VP EMEA at Xactly, argues that workers should be rewarded based on their output, rather than their tenure – i.e. moving from a salary-based economy to a performance-based economy. That way, men and women will be rewarded fairly.
Ahead of Equal Pay Day tomorrow, Castley said:
'Equal Pay Day marks the day where women are effectively working the rest of the year for free, something that is still unfathomable. It stresses the fact that all UK businesses need to play their part in eradicating the gender pay gap. This should be a priority to ensure days like this are no longer needed. 85% of UK businesses have admitted that a gender pay gap exists amongst the UK business community, and although eight-in-ten leaders say their business has a clear strategy to review and close the gap, it is clear that it isn’t making fast enough progress: in the UK we have a current pay gap of 18.1%.
'If we are to close the gender pay gap in the UK, it is vital that we move away from the old-fashioned salary economy to the performance economy. Businesses often say that women are paid less because they take time out of their careers to have children: this excuse shouldn’t stand any more. Instead of paying people based on their position and tenure, employees must be rewarded for their output. Empirically linking pay and performance, using data, will ensure that both women and men are being rewarded fairly for what they do. Only by moving beyond the outdated gender pay gap can we secure the UK’s success for the future.'
Geoff Pearce, VP – Reward at NGA Human Resources, said:
'As one consequence of the UK’s vast gender pay gap, Equal Pay Day marks the date women effectively start working for free for the rest of the year. It is therefore small progress that Equal Pay Day 2016 falls a day later than it did last year, highlighting how the gap is slowly narrowing. However, a lot more needs to be done to bring about true equality. Current estimates see the UK take over half a century to eradicate the gender pay gap. We cannot wait a whole generation for this to happen so companies must take decisive action now, if they want to contribute to a more equal society.
'The gender pay gap isn’t just about top line salary figures though. Looking solely at the salary differential between men and women fails to tell the whole story and could be positively misleading. Organisations need to analyse their current position and develop longer term solutions to address any issues that they find. Frequently, the response to equal pay challenges are "spot fixes", which rarely work in the longer term and often cause other problems. Organisations need to continually monitor the gender pay gap closely to ensure ongoing parity and nurture a culture of diversity, if they want to help make meaningful progress.'