Why Are Women Paid Less Than Men – Procurement Needs To Look Beyond Headlines

We got involved the other weekend in a bit of a Twitter debate about the idea (in a Tweet from a certain well known procurement organisation) that recruiting women into procurement was making use of a "relatively untapped resource"(!)

Ill-chosen words perhaps, but more importantly, we are seeing a lot of headlines around gender pay audits in various organisations, which tend to be along the lines of “Men Earn 22% More Than Women At Disney In The UK As Hollywood Studio Publishes Gender Pay Statistics”.

Procurement leaders should be looking at this in terms of their own functions as well as feeding into the corporate analysis. But there are two major and different causal factors behind these headlines, and it is important to understand how the numbers are derived.

So consider an organisation. It has 80 junior procurement managers, 35 men and 45 women. All earn £25K a year (let’s say for simplicity). It also has 20 senior managers, 15 men and 5 women, all on £50K a year. So on average, men earn £32.5K, and women £27.5K - just 85% of the male average.

In this case, the organisation is “fair” in terms of what it pays for a given role, but there appears to be an issue with women not making it to the higher levels. The reasons for that need to be analysed; there may well be some bias in terms of who gets promoted and recruited into senior roles.

Or there may be historical reason why this organisation or sector has not attracted women until recently – so it may take a while for the more junior women, who clearly are now around, to work their way through into senior roles. Or perhaps the senior jobs are somehow less attractive to women, perhaps there is constant travel or unsociable hours which doesn’t fit with childcare responsibilities (and yes, we know men should be sharing in those too but we’re not quite at that place yet).  Maybe more women work part-time. Anyway, the reasons need to be analysed and addressed.

Now look at another organisation, with a profile where there are 40 junior men and 40 women, but the men earn £30K a year and the women £25K.  There are also 10 men and 10 women at senior levels, where the men are on £55K and the women £45K.  So the average here for men is £35K and for women £29K, some 83% of the male average.

While the end result is very similar, here we see a different problem to the first organisation.  There certainly appears to be built-in discrimination, unfairness or bias in terms of how much men and women are paid for the same job. Apart from the fact that this may well be illegal under equal pay legislation, it is also likely to be divisive and work against recruitment and retention of capable women. It needs to be addressed urgently.

There is another debate to be had around how organisations get into this situation. While in some cases it may be nothing more than pure bias, there is some evidence for instance that women are less “pushy” when negotiating their salary on joining an organisation or on being promoted.  There may be some similar issues where bonus is a significant element of overall remuneration; is there a culture where men are expected to argue their own cause aggressively (and more so than women) when it comes to bonus time?

Of course, in some organisations there may well be a combination of both issues – the lack of women in senior roles and unfairness in terms of pay for similar jobs.  But our point really is that the basic percentage headline from these audits does not really tell us which issues need to be addressed. As so often is the case, you need to go beyond the headlines and look at the detailed data to understand the issues - then address them appropriately.

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  1. Eugene Cooke:

    This is a good article…and one that I have seen reflected in my own situation of nearly 40 years in the NHS. In the NHS we have the ‘dear old’ Agenda for Change which means if you go for a role, it doesn’t matter if your male or female the payscale is the same.

    I think over the decades and it has been slow to change, the NHS at the very top has been and is usally run by men, check out DHSC, check out Trust Boards, see what you think! There are copious numbers of males…..it has changed in recent time but too slow and the average wage is skewed by the differential in the actual numbers of male to female as you point out.

    I think that this is a cultural issue, where it has always been that ‘Men’ were at the top…as I say, it is changing, but way too slow. There are so many very capable women out there who (in conversations with me) have said that due to ‘having babies, being the mother, having the lead caring role’ has stifled their progress…so there needs to be a further extension of the flexibility of ‘fathers’ to do more of this ‘important lead role in the home’ and free up the brilliant women to pursue what they so rightly deserve.

    Just look at the world today and you just have to see that behaviours are reflected by those in power…Trump, Putin, Assad, Kim Jung Un to name but a few….I will leave that out there…

    I can only speak from my own experience and I have heard much anecdotal evidence around ‘bullying’ (their word not mine, but remember it is how they have perceived the pressure) of female staff because of the time they take out for having children (up to 12 months off) / caring etc.,’ so personally as a father, I fully support any parent whether male / or female and when I interview, the best ‘person’ qualified gets the job. I can stand by my own record and others need to do the same.

    Things will only change, when the mindset changes!

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