Whether you liked the results of the UK elections or not, one thing everyone can agree on is a rise of female MPs by a third, now at 29% after the largest increase since 1997. It is an important milestone in tackling gender disparity and whilst this is something to celebrate, there is still work to be done, as women currently make 191 out of 650 MPs. The female representation issue is also prevalent in business.
According to the International Labour Organisation, women are gaining a foothold in middle and senior management positions, but are still drastically under-represented in the C-Suite. With only four countries witnessing boardroom seats occupied by 20 percent or more women, it’s evident there needs to be a shakeup in the business world. Our own Xactly Insights™ shows that women are overachievers when it comes to leadership effectiveness both in sales or general management.
However in the US, women receive $8000 (£5000) less than men for the same role – this isn’t right and it is something that can be easily corrected. When we delved into Xactly’s data we found a few pay discrepancies and quickly corrected them. Today the situation is even worse in London, where women earn on average £7,000 less than their male counterparts and secure lower bonuses – women only get 16 percent of their salary compared to 23 percent for men.
This means women are earning a lower salary and a lower bonus, which has negative repercussions for both families and businesses. IMF managing director, Christine Lagarde, believes equal pay between men and women would increase GDP among OECD countries by 12 percept. Economic factors aside, it is clear that to get the most out of a workforce, there needs to be a system in place which is seen as treating employees equally, regardless of gender.
If compensation schemes are seen not to reward appropriately, they can drive the opposite behaviour that is intended; reduced motivation and the risk of valuable employees quitting. If a high performing female salesperson witnesses an equally performing male colleague receive a larger pay out, this may undermine her loyalty to the company and be a catalyst to seeking employment elsewhere.
A forward-thinking company that closes its gender disparity gap quicker than others will attract talent. To be ahead of the curve, companies need to review annual salaries and bonuses to check for imbalances, and immediately rectify them when found. Communicating to the whole organisation the steps being taken and why it is important is key in procuring cooperation between different departments.
Putting equal pay parity as part of corporate messaging is an effective way to reassure employees, and the public, that a business is taking definitive steps to remedy this issue. Quick action to incorporate equal business practises throughout the organisation can save the C-Suite from media accusations of sexism in the 21st century.
It is time for politics and business alike to pursue equal pay and representation for women for a more productive and happier workforce. Here are our four guidelines you might want to consider:
- Companies need to review total salary when exploring if they're providing equality in pay
- Compare the teams salaries with those of peer organisations through tools such as Xactly Insights
- Publicize the fact that the company is paying equally - #equalpay is an option
- From next year UK companies with over 250 employees will be obliged to provide transparency from next year. It's time to get your house in order.
For further data from our Xactly Insights team, take a look at our ‘Playing fair’ infographic.