What can big learn from small when it comes to tackling the gender pay gap?

Never before have small business sectors outpaced large companies in the bid to bridge the gender pay gap. Here's what big learn from small in tackling the wage gap.

The issue of the gender pay gap has raised its thorny head on a number of occasions throughout 2017. Most notably, publication of the BBC’s annual report in those far-off heady heights of summer made front page news with the revelation that two-thirds of its stars earning more than £150,000 a year were male. More recently, Equal Pay Day was ‘celebrated’ on November 10 – the day from which women effectively stop earning for the rest of the year, such are current levels of inequality over wages.

Depending on what calculations you use, the overall national gender pay gap is about 17 to 18 per cent. In 2011, the Chartered Management Institute said it would take another 98 years to achieve total pay parity; some writers believe that even this prediction is optimistic and that the gap will never be eradicated.

But what about the nation’s 5.5 million small businesses, the lifeblood of the economy? Have SMEs done more than larger companies to reduce the gender pay gap?

SME-dominated sectors are twice as focused at reducing the gender pay gap

A report commissioned by Informi reveals that the gender pay gap in SME dominated industries has fallen from 22 per cent to 13 per cent since 2008, compare to a national fall from 21 per cent to 17 per cent. Every SME-dominated industry reported double digit wage growth for female pay over the past decade, and at the current rate, wage equality across these industries will be achieved by 2034.

So while the gender pay gap in 2008 was around the same as the national figure, the gap in the 12 SME-dominated industries we focused on has, significantly, been reducing at twice the rate as it has nationally.

Why is this the case, and what can large companies, who after all are responsible for publishing their own gender pay gaps by April 2018, learn from SMEs? Informi spoke to some small business owners to help provide some of the answers.

Tradition and legacy may hold larger companies back

Anna Skopets is founder of Treevitalise, which produces organic birch water designed to be a refreshing, low-calorie alternative to soft drinks and juices. She believes that SMEs are in a much better position to adapt to the changing marketplace, and points to countless examples of female entrepreneur success stories.

“There is, inevitably, much more rigidity and overtness to change in big companies,” she says. “Their complex organisational structures are well rooted in the past, and are in the way of very much-needed change. With the Millennials taking the driving seat of the economy, they are changing the overall professional culture. Of course, this is much more noticeable at start-up and SME-business level.”

Kim Farrall is a graphic designer based in Cheshire, and co-founder of OffGrid, an independent design agency. Her firm deliberately seeks to work with businesses they are inspired by and who are themselves trying to do something different, meaning that there is a mutual interest between Offgrid and their clients.

“In a small business, you get to know people within your firm and truly appreciate their worth, as a person and not just a statistic” says Farrall.

“We can be extremely agile as an SME. Our rates, hours and team can inflate and contract on a project by project basis, meaning that our company can fit around many other businesses. Large businesses can’t change in such a way. They become shackled by the processes. No decision can be made quickly, and in a world that is moving quicker each day, you can become outdated, immovable and unequal.”

Chloe Chambraud, gender equality director for Business in the Community, whose members work to build a fairer society and more sustainable future, added that women are held back in part due to the industries where the money traditionally goes.

“For example, women are over-represented in the ‘five Cs’ – cleaning, caring, cashiering, clerical and catering – which are traditionally low-paid and insecure roles,” says Chambraud.

“Meanwhile, male-dominated sectors such as STEM (science, technology, engineering and mathmatics) are also the most likely to have the highest gender pay gaps according to the Office for National Statistics.

Up the career ladder and into male-dominated industries

So with inflexibility and tradition holding many larger firms and even some industries back, what exactly can they do to help achieve gender pay parity – even from potentially a tougher starting point?

OffGrid’s Farrall believes that a new approach is needed. “Large businesses, from my experience, far too often overlook the people behind the company,” she says. “Management has criteria to fill, boxes to tick and guidelines to meet which leaves very little time for actual relationships with the co-workers they’re managing.”

“Smaller businesses are not burdened by layers upon layers of communication and decision-making,” adds Treevitalise’s Skopets. “They are agile and flexible, and either set up or employ millennials whose understanding of the changing role of women in the professional workplace differs from that of their parent’s generation.”

“For gender pay equality to stop being an issue, we should be seeing more women taking senior managerial roles. It’s at the board level that things need to change.”

Business in the Community’s Chambraud believes that some industries need to work harder to attract women to work in them. “We need to increase female representation in male-dominated sectors, such as through unconscious bias training for those involved in recruitment and hiring,” she says. “There is also a need to focus on how to address pay gaps in those undervalued, ‘feminised’ careers,” she explains.

“If employers want to create truly inclusive workplaces, they will need to address the root causes of inequality, from increasing transparency in recruitment, appraisal and promotion processes, to normalising agile working and offering financially viable parental leave packages for all parents.”

Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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