Business analysis: Why Covid-19 has waged war on gender pay gap progress

The first deadline for mandatory gender pay gap reporting was in April 2018. This applied and continues to pertain to all public sector, private and charitable organisations employing more than 250 people, based on a “snapshot” of pay data on April 5 of the previous year.

That inaugural round of reporting generated widespread coverage and criticism as we finally got a quantitative grasp on the scope of the problem. Companies were named and shamed, and the data was sliced into a profusion of permutations to ascertain why women were still earning a median 11.8% less than men.

But for all the furore there was no tangible impact. Go to 2019 and the median pay gap had edged higher to 11.9%. We’ll never really know about 2020 because as the coronavirus pandemic was raging, the Government announced in March that it was suspending the reporting requirement to relieve hard-pressed companies of this administrative burden.

It sounds reasonable enough, but consider this: the announcement came just two weeks before the reporting deadline. The data required to report would have been collected nearly a year earlier. Surely most conscientious organisations already had this information compiled and ready to go?

Perhaps, but whatever the case may have been, the fact remains that half the number of companies that would normally be required to report have chosen not to share their figures. Furthermore, among those who have, the situation has deteriorated to an even greater degree.

According to analysis released on Friday by the Business in the Community network, the gap among the 5,581 organisations that did provide gender pay information in 2020 jumped to 12.8%. That, combined with the lack of data from so many others – including members of the FTSE 100 – has led to concerns that the Covid-19 crisis could set back women’s equality by a generation.

“Pay gap reporting is a vital tool in understanding and tackling gender inequality at work,” said Charlotte Woodworth, campaign director at Business in the Community. “If we don’t have a clear picture of women’s status at work entering the crisis, we won’t be able to take the right steps going forward.

“It is hugely disappointing to see so many opted out when the legal requirement was lifted – and a worrying sign of attitudes towards gender equality during the crisis.”

If Brexit was already proving a distraction for the C-suite denizens, then coronavirus has literally sucked all the oxygen out of the boardroom when it comes to gender equality. While understandable, this dramatic shift in focus comes at a vulnerable time for women, who are among those bearing the brunt of this health crisis.

Even before Friday’s report from Business in the Community, the Institute for Fiscal Studies (IFS) had warned that lockdown could increase the gender pay gap and do lasting harm to the careers of mothers once lifted.

Measures to contain the virus have disproportionately affected roles often held by women, who account for 70% of sales assistants, cashiers and airline cabin crew. The IFS estimated that mothers are 47% more likely than fathers to have lost or quit their job during the crisis.

But even those who are still working face incommensurate challenges. In its survey of 3,500 households, the IFS found that women are taking on more housework and childcare during lockdown than men, even if both partners have the same working arrangements.

Mothers are more likely to be interrupted during the day, and as a result are spending less time on paid-for work. Those in two-parent households are doing on average just one-third of the uninterrupted hours of paid work as their male partner.

Even in families where the mother was the highest earner prior to lockdown, women are still doing more childcare and the same amount of housework as men.

“Mothers are more likely to have moved out of paid work since the start of lockdown,” IFS research economist Lucy Kraftman said. “They have reduced their working hours more than fathers even if they are still working, and they experience more interruptions while they work from home than fathers, particularly due to caring for children.

“Together these factors mean that mothers are only doing one-third of the uninterrupted paid-work hours that fathers are. A risk is that the lockdown leads to a further increase in the gender wage gap.”

The role of part-time work in perpetuating the gender pay gap is well documented. Women are more likely to work part-time, where the hourly rates of pay are significantly below those for full-time employees. This is a massive drag on women’s mean salaries.

The assumptions behind this is that it’s a “choice” to prioritise children over paid work, when in reality it’s often a lack of viable options. This is the kind of thinking that lets employers off the hook by putting the onus straight back on women’s shoulders. High-quality flexible working across all sectors would go a great way towards solving this conundrum, and with Covid-19 currently revolutionising the way in which we work, there’s never been a better time to redesign jobs at all levels so that women and men can balance professional ambition with other responsibilities.

We know that many men in the UK want to work part-time: research has shown that more than half of young fathers would take a pay cut to work less and spend more time with their families. But dated societal expectations still hold strong sway, with men finding it harder to ask for part-time work. Men are not the problem per se when it comes to the gender pay gap, but must be part of the solution. When the expectation becomes that every person has an equal share in caring responsibilities, that is when the financial and career development stigmas of flexible working will be eradicated to the benefit of all.