UK gender pay-gap costs women £85 billion in lost wages

23 May 2017 Consultancy.uk

Big Four consulting firm PwC has found that despite progress in other areas, female workers remain disadvantaged, with wage disparity in the UK standing at £85 billion in lost wages. Individual women are deprived an average of £6,100 per year by gendered salaries, the group's research also confirmed.

The world of work remains fraught with unequal employment relationships, with the consulting industry particularly prioritising research on the gender divide in recent years. A number of recent reports have highlighted that women are underrepresented in key strategic decision making functions within boardrooms, and face considerable structural barriers in promotion, with the latest from from PwC finding that pay level parity is continuing cause for concern. 

Measuring the current lot of the female workforce across the OECD, PwC developed the ‘Women in Work Index’, which combines a range of key indicators to create an overall performance score for female economic empowerment by country.

PwC Women in Work Index

The top 5 countries, according to the data gathered from the OECD and Eurostat, have seen no movement up or downward in the 2015 chart. Iceland retains the number one spot, by even further solidifying its lead over second-placed, Sweden. Norway saw a slight deterioration in the role of women in the country meanwhile, as female unemployment increased across the 2015 term, although it remains in third spot. New Zealand meanwhile held fourth, while Slovenia solidified its fifth spot, with a strong boost to its index score.

Ranked sixth, Denmark polled a slight improvement, while Luxemburg climbed one place from the 2014 to take seventh. Poland managed to significantly improve its standing on the 2014 report, largely due to improved female employment, moving from 12th place to 9th, while Canada fell two spots in the annual ratings – even while its overall score increased – to come 11th. The UK still missed out on a coveted top ten position, however it saw its score improve slightly, pushing to 13th spot.

Biggest movers in the PwC Women in Work IndexThe analysis also showed Israel made the biggest improvements in the role women play in society, since the rankings began in 2000, moving from 26th spot to 14th. Meanwhile, concurrent with 2015's improvement, Poland too has managed to up its score significantly, elevating itself ten spots over the 15 year period. Belgium moved up eight, to 12th spot, while New Zealand has seen its already strong 8th spot become number four. The UK improved its ranking by 4 spots in the fifteen year period.

Australia, however, has seen its position deteriorate from 13th to 22nd spot, while Portugal has lost ten places, falling from 5th to 15th. The US has seen the most significant deterioration however, as it lost 11 places to take 20th spot in 2015.

Potential increase in total female earnings from closing the pay gap

In terms of the income gap averaged across all sectors, the research finds that considerable differences exist between countries. The US for instance has a total female earnings gap of 23%, amounting to absolute lost income of a colossal $800 billion annually. In Japan however the gap is proportionally even larger, at 34% on average, with total lost earnings amounting to $250 billion. Korea has the highest proportional gap at 57%, followed by Estonia at 40%. The UK has a gap of 20%, representing around $110 billion (£85 billion) that is not making into the pockets of women, while wage parity would put an average £6,100 more into the hands of women across the country.

United Kingdom

Difference in pay by sector

The UK pay gap differs considerably across various functions. It is by far the most uneven in financial services, with the average pay gap in the industry at 34% - given the usually high-base salary of the sector, the gap in absolute terms is more considerable. In energy and utilities the gap comes in at 26%, followed by manufacturing – traditionally a male dominated industry – where the gap is 24%. The areas with the lowest gaps are in admin and support services, 12%, public administration, 15%, and education, also 15%.

The largest pay gaps are noted to be in the West Midlands and the North East of the country. Scotland and Norther Ireland tend the have relatively low levels of inequality in male/female pay.

Potential increase in annual female earnings per woman from closing pay gap in UK by region

Locally, closing the pay gap in London could see a £8,800 boost to female earnings per person of 20%, while in the West Midlands and the South East the difference amounts to £7,300 per person, a 27% boost in pay. In the East the difference in pay is around 23%, or £6,800 in absolute terms. The North West and Scotland both have partitions of £5,300 in absolute terms, or 19% and 18% respectively. Northern Ireland has a pay gap £1,900 or 6% - the lowest across all regions by far in both absolute and relative terms.

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Women remain underrepresented in UK's hospitality industry leadership

12 April 2019 Consultancy.uk

Female engagement at the top level of the UK hospitality industry is still lagging, with the vast majority of decision-making roles continue to be held by men. Only 7% of the industry’s FTSE 350 CEOs are women; however, the pay gap in hospitality and leisure is far better than in other industries, at a median of approximately 7%.

The hospitality, travel and leisure (HTL) sector is one of the UK’s largest employers, with 3.2 million people working in its segments. Despite a poor 2018 in terms of tightening consumer spending, the industry is still one of the top sectors in terms of economic activity, hitting £130 billion last year – besting the UK’s automotive, pharmaceutical and aeronautical sectors’ combined activities.

While the industry is one of the country’s largest employers, it still faces considerable issues around diversity at the top. New analysis from PwC has explored the matter, as well what initiatives the industry has engaged to open up its top ranks to a more diverse background.

Female representation at board level for UK companies and HTLs

According to a survey of CEOs, Chairs or HR Directors of over 100 of the most significant leisure businesses across the UK, the hospitality industry has a relatively male-dominated top level. This lags behind the FTSE 100, where companies have female board level representation at 32.2%. Meanwhile, the figure for the combined executive committee and direct reports stands at 28%. This is well above FTSE 250 levels, where female board level representation stands at 22.4% and executive committee & direct reports stand at 27.8%.

For the hospitality industry as a whole, board level representation came in at 23.6%, with FTSE 350 for the industry performing slightly better at 25.1%, while non-listed companies performed considerably worse at 18.2%. The firm notes that the figures hide that while some companies are making strides to improve equality, others are not moving forward – with the positive result reflecting more often the good work of some, while others are not taking the issue seriously in their agenda setting.

Blind spot

The study states, however, that while the overall numbers are relatively strong, the industry has a number of acute weaknesses. These include CEO numbers, with only 7% of HTL FTSE 350 companies helmed by women and 11% of non-listed companies led by female CEOs. Meanwhile, female chairs at FTSE 350 companies for the sector stand at zero. In terms of wider diversity representation, only 1 in 33 leaders at industry companies is from a BAME background.

Pay gap for HTL and hospitality

The report noted discrepancies between FTSE 100 companies and FTSE 250 in terms of improving the number of women at executive level. The majority have met the Hampton-Alexander Review target of 33% women at board level, up from around 25% in 2016. However, the remaining ~40% are not on target, and are unlikely to meet the target by 2020. A similar trend is noted when it comes to executive committee and direct reporting numbers.

Jon Terry, Diversity & Inclusion Consulting Leader at PwC, said, "To make real progress in diversity and inclusion, businesses need to elevate it onto the CEO’s agenda and align diversity & inclusion strategy to the fundamentals of the business."

Tracking progress FTSE 250 level

However, one area where hospitality travel and leisure companies are outperforming other companies in the wider UK economy, is the mean and median pay gap between men and women. PwC found that the median of the wider UK economy comes is approximately 14% – with upper quartile companies noted for a gap of low 20%, and lower quartile companies noted for differences of around 2%.

The median pay gap for HTL comes in at well below 7%, with the median close to parity. There are considerable differences, however, with hospitality at 7%, while travel comes in considerably higher, at 22%. The latter figure reflects fewer women in higher paid pilot and technical positions within the industry.