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Four ways to Tackle the Gender Pay Gap

Updated: Aug 30, 2021

The gender pay gap persists decades after International Labour Organisation Convention Number 100 on equal remuneration. The problem of equal pay is deep-rooted in systemic disparities and discriminations, and to equalise pay, there is a need to de-bias systems. The UK Government Equalities Office says that “employers who use high-quality data to understand the drivers of their gender pay gap can target their actions and therefore deliver the most effective results.” Policies to close the gender pay gap must be developed in tandem with corporate goals. Sustainable change can be achieved through evidence-driven policymaking processes.

Tackling the gender pay gap requires individual and systemic changes. Some key strategies helpful in achieving this includes:

By formalising the informal sector: women have equity in accessing opportunities and negotiating for better pay. UN Women indicates that this includes “improving the valuation of women's work through strengthening legal and collective regulation, and extending gender pay audits and action plans.”

Education and training policy changes: education is key to the attainment of knowledge and skills, so women can compete in the job market. Policies that promote education and training in technical disciplines like science, technology, engineering, and mathematics ensure women have equity in qualification to compete for job opportunities in related fields, usually dominated by men.

Transparency in pay and reward processes: Women are unlikely to negotiate higher salaries if they do not know what constitutes a fair offer. Openness about the criteria, processes and procedures used in pay and reward decision-making is crucial. Transparency allows room for negotiations and leads to impartial compensation for work of the same value. This ensures that all employees, regardless of gender, understand and guarantee fairness in processes and equal pay.

Reverse mentoring: The gender pay gap is best articulated by those affected, which helps formulate targeted solutions that are appropriate for each employee. Women, who are given the opportunity to lead management, help formulate smart solutions to close the pay gap. For example, Ernst & Young's "Race Reverse Mentoring Scheme" helps its leaders in decision-making, as indicated in its 2020 Pay Gap Report.

Research confirms that closing the gender pay gap has economic benefits. McKinsey Global Institute report found $12 trillion could be added to global GDP by 2025 if gender gap is narrowed. IMF also reported that if as many women as men worked, GDP would increase by 5 per cent in the US, 9 per cent in Japan, 12 per cent in the United Arab Emirates, and 27 per cent in India. The IMF report shows that only 2 of 10 senior positions in Europe are held by women, and increasing that number to 3 per cent would lead to a company's return on assets. Closing the gender gap is hence evident and invaluable today. Therefore, each organisation must progress the agenda to tackle the pervasive gender pay gap.


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