The gender pay gap may not be the gaping chasm it once was but progress on its closure, although being made, has been painfully slow. The introduction of gender pay gap reporting in 2022 has helped tease out the picture within organisations and across sectors, and has helped companies highlight what they can do to better bridge the gap.
Across Europe, the gender pay gap has seen a 3.7 percentage point decrease over the past decade, and the EU’s average gender pay gap in 2022 remained at 12.7 per cent, although there are significant differences between countries – from a gap of -0.7 per cent in Luxembourg to 21.3 per cent in Estonia. Ireland is roughly in the middle, with a pay gap of 9.6 per cent, as per the latest data from the Central Statistics Office.
According to Michelle O’Keeffe, co-founder of Platform55, which is working to drive gender equality in organisations, there are many positives – new legislation around equality, pay transparency and ESG (environmental, social and governance issues) has led to greater awareness among organisations.
“It also means that current and future employees are aware too. We are of the belief that ‘what gets measured gets managed’ so in this respect reporting is a good thing,” she says. But reporting is more than just stats, says O’Keeffe, emphasising that organisations must also build a strong narrative around actions they’re taking to drive change, so that such change is sustainable.
There has been “definite progress” on the gender pay gap, says Gillian Harford, country executive at the 30% Club Ireland. “We are definitely seeing focus and definitely seeing progress, on average, but within organisations some of the changes might be a little bit more subtle,” she says. Harford says gender pay gap reporting has helped in focusing the conversation less on pay and more on the issue of representation. Women, on average, tend not to be in high-paid roles within an organisation.
“The gender pay gap is driven by unequal representation across an organisation,” says Harford. “An organisation might be 50/50 male and female but the representation at different levels is very unequal, where it is weighted very differently at the top and at the bottom.”
Under-representation is also an issue – women may not have senior roles in certain areas of the business, such as sales or technology, where there tends to be higher pay, commission or bonuses. While gender pay gap reporting has helped shine a spotlight on this, it’s not an overnight fix.
“The most important thing we see happening is companies beginning to understand why they have a gender pay gap and considering what needs to be done to drive change,” Harford says.
This year, employers with more than 150 employees must report on their gender pay gap; in 2025 the requirement will apply to those with more than 50 employees.
“We will have a new batch of organisations reporting on their gender pay gap this year so that will be interesting to see how it impacts on the averages across Ireland,” says Harford. “We might see some ideas and creativity from some of the smaller organisations that will now be reporting.”
Pay transparency instruments, such as Irish gender pay gap reporting, have become an increasingly used tool in the EU and beyond, says Christine Aumayr-Pintar, a senior research manager in Eurofound’s working life department.
“They aim to reduce the secrecy around pay – for example, by putting pay ranges for a job in vacancy notes, reporting data on pay gaps within or outside the company, by allowing workers to obtain information on how their pay has been set in relation to comparable workers of the other gender, or by scrutinising companies job evaluation and remuneration schemes,” she explains.
It is the latter – so-called ‘pay audits’ – that are regarded as most beneficial by managers and employee representatives, according to Eurofound’s research.
Recent academic studies from the UK, Denmark and Switzerland have shown that gender pay gap reporting helped in reducing gender pay gaps in companies – but they need to be well designed, notes Aumayr-Pinter. Publication requirements appear to be key.
She agrees with Harford that incentivising women to move into higher paying sectors/activities and roles is one part of the solution but notes that achieving this, especially encouraging shifts into more male-dominated higher paid sectors and activities, has proven to be “particularly difficult”.
“Economy-wide, lowering pay differentials between sectors would be another tangible way to address the aggregate pay gap. But this requires strong co-ordination between sectors in terms of wage setting,” Aumayr-Pinter says.
Doone O’Doherty, tax workforce partner with PwC Ireland, has analysed Ireland’s 2022 and 2023 reports but says it is far too early to detect any real trends.
“For the first year of reporting, many companies were just getting to grips with doing the calculations and understanding the drivers of the pay gap,” she says.
In fact, O’Doherty says, actions being taken to close the pay gap can take time and the situation may even get worse before it improves.
“For example, many companies are focused on building a pipeline of female talent, which is a really positive action particularly for traditionally male roles, but it may take a number of years for them to impact the gender pay gap,” she explains.
“Also, the employment market has been strong over the last few years and this is making pay gaps more volatile, with turnover being high. Whilst the headline pay gaps figures are important, understanding the key drivers of the pay gap is crucial in order to understand what actions are needed to effect change.”
[ Progress might be slow but the gender pay gap is shrinkingOpens in new window ]
Indeed, some commentators say the root causes of women earning less are mainly social in origin and much trickier to fix. O’Keeffe asserts that the “undisputed cause” of the gender pay gap is what she calls “the motherhood penalty”.
“The World Economic Forum reports that up to 80 per cent of the gender pay gap is attributed to this,” O’Keeffe says. “Women pause and step away from career progression.”
It’s not just mothers of newborns, but women with primary and secondary schoolchildren working in organisations that do not offer flexible work arrangements often have to choose between career and family, she adds.
“The UN has reported that at the current rate of progress it’s going to take 130 years to achieve gender equality in the workplace,” says O’Keeffe. “As few as one in 10 dads take their full family leave entitlements, meaning that the responsibility sits with the women in heterosexual partnerships and this is really delaying progress in driving gender equality.”
Platform55 is calling for organisations to take tangible actions to address this, such as tackling the issue of overwhelm in organisations, offering part-time roles, encouraging men to take parental leave and valuing people for outputs, not hours worked.
“Until organisations address how they support people with caring responsibilities to progress in their careers, we aren’t going to see the gap close significantly,” says O’Keeffe.