Challenges and opportunities in closing the gender pay gap

A UK law forcing businesses to reveal their gender pay gaps came into force in April. With the issue of gender inequality in the workplace being taken more seriously, what are the steps that businesses and the procurement functions within them – particularly known for their high disparity of pay – need to take?

Rachel Sharp, Procurement Blog, 09 June 2017

What you need to know

The new law, which will be enforced by the UK Equality and Human Rights Commission, stipulates that businesses with over 250 employees must provide detailed data on the pay gap between men and women, including the average hourly rate of male employees to female employees, the proportion of male and female workers in different pay bands, and differences in bonuses. Businesses have until April 2018 to publish this information on their customer-facing websites.


For some, this will mark the first time ever that the business records, let alone publishes, this information.


In comparing the proportion of men and women in different bands of the pay structure, it is hoped this will expose any real inequality that would otherwise remain hidden.


After all, a business may have a fairly small overall average pay gap, but this may not expose the real drastic inequality at one particular level or band of the organisation.


Where the figures are largely unfavourable, companies are encouraged to also publish an action plan on what steps they will take to close that gap.


What should procurement do

For five years, Procurement Leaders has been measuring the salaries of those working in the function. In each of these years, the data has shown that men earn more than women.


Procurement Leaders’ 2017 salary survey (opens new window) (available to members) found that, on average, women’s salaries stand at 75% of men’s, suggesting their is some way to go before pay equality is reached within the function.


To get ahead of the new rules, CPOs would be well advised to start thinking about what steps they can take to reduce the pay gap. Starting early may also help to attract women into the function who will add that degree of diversity, which is so important in terms of creative problem solving and building relationships with stakeholders both inside and outside the business.


Even those outside the UK should start thinking about this. It could benefit the function on a number of different levels.


This article is a piece of independent writing by a member of Procurement Leaders’ content team.