Inflation set to widen the gender pay gap throughout UK
After UK inflation hit 7% in March, prices across the country are rising at a rate that hasn’t been seen for 30 years. This is a development that adversely affects a greater proportion of women than men due to the gender pay gap, especially in the financial sector. Not only that, but research also suggests women are being unfairly treated in comparison to their male counterparts in terms of flexible working opportunities. Chris Biggs, partner at Theta Global Advisors, stresses the importance of tackling both issues and discusses how companies can recruit and retain talent at a time when job vacancies are at their highest level ever.
According to a study by CIPHR, women were less likely than men to receive a salary increase that was in line with or above the rate of inflation for 2022. About 1-in-7 women (14%) who had received a pay raise to date said it was in line with or above the rate of inflation compared to roughly 1-in-5 (22%) men. According to the Office for Budget Responsibility, pay is not expected to keep up with the rising cost of living, suggesting the UK’s gender pay gap may grow in the year ahead.
Even without the current rate of inflation, the pay gap in the UK has been falling by an average of just 0.6% each year, meaning it would take a quarter of a century to achieve pay parity between men and women. According to a recent analysis from the Trades Union Congress, the financial sector, including accountancy and consulting, has one of the largest gender pay gaps in the UK, with the difference in hourly earnings coming in at 32.3%. This means women in this industry on average work 118 days for free in comparison to their male counterparts.
As a result of the pandemic many workers are now enjoying previously unseen benefits in terms of flexible and remote working. However, aside from the significant difference in pay based on gender, recent research from CIPHR also found that just one third of women were offered flexible working options in comparison to over two fifths of men.
Chris Biggs, partner at consultancy and accounting disruptor Theta Global Advisors comments:
“The gender pay gap is one of the main problems faced by employees of accountancy and consulting companies, and more must be done to bridge this disparity in all sectors. This includes implementing inclusive hiring strategies, working to create diverse and comfortable environments, and offering flexible working options across the board.
“The option of having a flexible work schedule has become fundamental for post-pandemic workers. But the big companies still seem reluctant to offer these benefits to their employees because of the fear of decreased productivity and therefore a loss in profits.
“At Theta Global Advisors we realise the importance of a reasonable work-life balance and how important flexibility is for workers. We find that this can increase productivity and provide staff with a working environment everyone can thrive in. The big companies are in a dangerous position where they need to change or could face a mass exodus of talent.
“By trying to be innovative employers that think about strategies to accommodate every employee’s needs, especially at a time when the cost of living is so high, companies will find ways to recruit and retain staff, while hopefully helping to shrink the wage gap.”
