Women are paid less than men: Here's how to fix it

The deadline of midnight on 4 April has passed and all British companies should, by now, have reported their gender pay gap.

Almost eight years after the Equality Act, we have data – the first of its kind in the world – that lays bare the scale of the gender pay gap in private businesses and the public sector.

The figures reveal men are paid more than women in 7,516 out of 9,644 companies and public bodies in Britain, based on the median hourly pay. Across the companies and organisations that had filed by 5pm on Wednesday, eight out of 10 had a gender pay gap.

While the figures do not reflect equal pay for equal work, they do raise questions about structural inequalities in the workforce and may hold the answer to closing the gap.

Sucheta Nadkarni, professor and director of the Wo+Men’s Leadership Centre at Cambridge Judge business school, says that – despite flaws – the figures do indicate men are paid more than women on average.

She said: “Whether it is because women are getting paid less for the work that they are doing or because women are not getting equal opportunities to get into positions where the pay level is high – it doesn’t matter what the reason is, but there is a gender pay gap and in most cases it’s an issue of equality and justice. In both cases it’s an issue of an imbalance of some sort.”

The figures also highlight which industries pay women less on average.

The construction sector reported the worst average median gender pay gap at 25%. This was followed by finance and insurance at 22%.

Perhaps unexpectedly, education – a sector predominantly filled with university-educated women – has also fared badly due to sizable gaps across multi-academy trusts. The sector’s average median pay gap is 20%.

But women are likely to experience something closer to pay equality in the accommodation and food services sector, which has a 1% pay gap. However, no sector pays women better than men on average.

Another clear takeaway from the figures is that women are not making it into the boardroom. The data shows women are underrepresented in top-paid jobs, when compared to the business as a whole, in 82% of companies.

The figures paint a stark picture and the trend persists even within female-dominated companies. For example, while the workforce at HSBC Bank is 60% female, the top earners at the bank are predominantly male.

But when organisations achieve better representation at the top, something interesting starts to happen. A Guardian analysis of the data shows that in companies where women are fairly or slightly overrepresented in the top pay band, the median gender pay gap shrinks relative to the composition of the company as a whole.

Nadkarni, who has researched gender diversity in senior management in her work, believes gender balance in the boardroom may explain a smaller gender pay gap.

“When men and women work together, that’s the best dynamic because men become more caring, working as part of a team with women, and women also become less competitive and much more caring. So the idea of putting men and women together is actually a very positive dynamic.”

Nadkarni has also observed the trend in her own research. “What we found out was, actually it’s not about having more and more and more women, but it’s having a balance of males and females which creates the maximum dynamic and creates a psychologically safe atmosphere.”

Thus, if we are to close the gender pay gap, the best place to start may be with the top-paid positions in British companies.