Reasons for the gender pay gap – what HR practitioners should know by Prof. Anita Bosch

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“The focus of this chapter is on the findings of research conducted in various parts of the world on gender pay inequities and linking these to human resource management practices and solutions. The chapter is written in a pragmatic style, to bring attention to the steps that human resource practitioners can take to bring change into effect”.

Differences in pay for the genders might not seem like a topic that is deserving of much attention, given the plethora of other urgent matters that human resource management practitioners face. A startling fact, articulated by Giapponi and McEvoy[1], brought the matter into perspective for me: many women are paid less than what men are, even though they are just as educated as those men, and women in the USA “lose between $700,000 and $2 million over their lifetime to unfair pay practices. Because women live longer than men, elderly women face financial jeopardy because of the pay inequities they suffered during their working lives”[2]. Unfair pay practices perpetuate societal inequalities and keep families in poverty. Poverty fuels global instability. It therefore stands to reason that, other than it being a moral imperative, HR practitioners who address gender pay inequality are making a considerable impact on the stability of the communities in which they live and, ultimately, on national and global stability.

In the studies under review, five main themes were identified that provided reasons for gender pay differences. Below, I expand on these themes, and provide comments on how HR practitioners might address these.

Skills development and careers

Where differences in pay for work of equal value can be related to race, gender, age, or other considerations, they may be discriminatory. The fact that there are a number of interrelated reasons for remuneration differences makes the identification of discrimination quite difficult. The burden of proof is often so cumbersome that job incumbents resort to leaving the organisation, apply deviant practices to make up.

The Equal Opportunity for Women in the Workplace Agency in Australia found that women’s skills are often undervalued, which leads to occupational segregation[3]. Skills such as caring, nurturing, and organising, which are generally associated with women, do not carry a high monetary premium. Clear evidence of this can be found in, for instance, the teaching profession, where salaries are quite low for work that ultimately has a very high social and economic impact. Very often, especially at primary school level, the teachers are primarily women. 

If children are not adequately taught at school, they cannot productively contribute to the economy, and these poorly educated adults often resort to delinquent behaviour, which carries a high social cost. So, whilst it may be argued that there are a great number of teachers available and that the skill of teaching is therefore not scarce, therefore teachers are not paid well, two important facts may be used as rebuttal.

Firstly, if teaching were revered by societies for the impact that it could make on national development, talented young adults would view it as a viable profession, which, in turn, would increase the level of skill and proficiency of teachers. The level of impact of teaching would improve, raising competition in the market for such positions, and teachers would be able to command a higher salary. Secondly, the long-term cost of undervaluing ‘soft’ skills has such a high social cost that nations cannot afford to continue to devalue care. The input and attention that a mature, concerned adult can provide into developing the mind of a child is difficult to equate with the worth of a stock exchange deal. What salary would you pay the person who optimally cares for your child? Would you be able to afford her if you had to pay market-related rates?

HR practitioners should consider their personal views about the value that skills bring to the workplace and to society. Our personal views are often translated into workplace practices and polices such as our company’s stance on the development of people or the value that is attached to all types of work. As people practitioners, we are able to influence mind-sets.

Further differentiators in women’s pay are aspects such as the taking of career breaksand lower investment in women’s training and development[4]. Most school leaving girls are aware that, should they decide to have children, they would have to combine their careers with the care that children require. Modern family structures are emerging, where men become stay-at home fathers, but, in South Africa, that seems to be the exception rather than the norm. Dual-career couples are more often the norm than single-income families, and single-income families where the woman earns the salary are very common.

Taken together, the care burden remains on the shoulders of women, and, therefore, career breaks, such as maternity leave or taking time out to raise children, are said to hamper women’s pay prospects. If you are not visible at work, or your CV has a gap that is non-work-related, your prospects of earning a high salary on return to work, irrespective of your skills, are not outstanding. Companies also often take the view that they would rather invest in the development of workers who will provide a return on their investment, rather than investing in women who will eventually fall pregnant and resign. Furthermore, workplaces reward those who work disproportionately long hours[5]. Often, women cannot work such long hours, due to their care responsibilities.

Gaps in CVs should not be seen as an impediment to the development of other skills from which the organisation could benefit. Not unlike male workers who returned to work after compulsory national service, women who re-enter the workplace after a career break will require some development investment. These returning workers are often very committed, and display a whole range of additional, useful skills that were developed in other domains of their lives. Gaps in CVs should also become more common as the new generation takes unpaid sabbaticals and other career breaks. Similarly, taking time off to raise a family should be viewed as a normal practice

Modes of work, job changes, and pay

When the gender pay gap is assessed, the comparison is not straightforward, in that many factors, such as the hours spent at work, full-time vs. part-time work, job type, and whether workers are paid weekly, per day[6], and so forth, often obfuscate potential underlying discrimination. Merely stating that women work shorter hours than men do, and therefore earn less than men, is not a valid justification for pay differences, as the hourly rate that these women earn is often also lower than that of men doing the same work for a full working day.

When a woman changes jobs, she is often offered only a slightly higher salary than the one that she received at her previous employer.She therefore may remain at a low level of pay, even though the skills required and level of responsibility of the new job might be considerably higher than those of her previous job. Organisations are able to get away with such discrimination when the new organisation requires a payslip from her previous employer. By providing such, she opens herself up to being offered less than what the job is worth at the onset of salary negotiations.

HR practitioners make use of job evaluation and place a particular job on a certain pay level within the organisation’s salary structure. The HR manager should know what the justifiable pay should be for a particular job. Since organisations want to limit salary negotiations, it is easier to ask for an old payslip and give the new incumbent a 10% raise on the previous salary. This practice should be interrogated, and inconsistencies in allocating salaries to a specific pay band and level eradicated – even though the organisation might argue that the practice brings short-term budgetary relief. Pay transparency[7]is synonymous with ethical employment practices.

Wage determination and collective bargaining

The role of unions in wage determination during collective bargaining cannot be underestimated. Often, collective bargaining is done by male negotiators, and it remains doubtful whether unions specifically strategize on matters influencing women’s pay before negotiations commence. More specifically, it remains doubtful that union negotiators are informed regarding the economic principles that underpin structural gender inequality created through collective bargaining. Karamessini and Ioakimoglou[8]argued that “wage setting is a political, cultural, and economic process, embedded in an institutional and societal context.” According to these authors, wage setting is not merely an economic process driven by market forces, but rather that wages are determined based on the “value of the labour power.”

Women’s labour, as explained at the beginning of this chapter, is often undervalued or not given a monetary equivalent with which to determine its economic value. Therefore, if wages are determined based on the value of labour, it stands to reason that the characteristics and skills that women display may be undervalued during the wage determination process. This would lead to “low valuation of the jobs that women do,”[9]and wage discrimination would lead to “unequal remuneration for the same job”[10].

In Greece, the gender pay gap was explained predominantly by noting that a greater concentration of women in the workforce of an industry led to an overall lower level of pay for the whole industry (for both men and women), compared to industries dominated by men[11]. Similarly, in Kenya, “industries and occupations which require fewer skills have disproportionately more female workers”[12]. A secondary important pay differentiator was tenure in jobs[13]. Individuals who were able to hold a specific job without breaks earned significantly higher salaries than women who took breaks.

HR practitioners can inform themselves of potential structural causes of gender pay disparities that are caused during wage determination and collective bargaining, and negotiate to eradicate these, in good faith, with the union. Such gestures during negotiations can go a long way in building and maintaining healthy employment relationships.

School subject choices of girls

It may seem surprising to request HR practitioners to consider how they could influence the subject choices of school-going girls. After all, HR practitioners deal with people at work. Smart HR practitioners think about the sustainability of their talent pipeline even before the entry of talent into the workforce, and extraordinary HR practitioners consider how they may influence and eradicate negative trends in their talent pipeline that are perpetuated over time.

The subject choices that girls make at school, whether they identify with, enjoy, and excel at mathematics, science, and technology, or regard these areas of study as a boy’s domain make a huge difference in the outcome of their future pay. Very often, girls regard themselves as incompetent at maths and science, and therefore do not identify with these skills, which have, over time, become scarce worldwide. At present, skills scarcity drives high pay. Women who hold a general bachelor’s degree in social sciences or humanities, as well as women with a business studies major, except for accounting, are more likely to earn lower incomes than those who hold bachelor’s degrees in the sciences or accounting[14].

Laurie found that the main reason for the lower pay for women with degrees in social science or humanities, or with a business major was that they were placed into job types that paid lower salaries[15]. This implies that, even if a woman is as educated as a man, she might earn a lower salary, due to her being selected for a job type that pays a lower salary. It may, therefore, be well worth the time and effort of HR practitioners to assist schools in identifying girls who excel at mathematics and science very early on, and to provide support and peer group networking for these girls, to ensure that they are able to make different choices by the time they reach high school and university. Working into the talent pipeline at school level provides a greater likelihood of a future supply of girls who have scarce skills.

Motherhood penalty – fatherhood advantage

Mistra and Strader[16]penned a compelling read regarding the role of parenthood in determining penalties and advantages. They found that, “While mothers earn significantly less than childless women with the same characteristics – referred to as a motherhood penalty – fathers earn somewhat more than childless men with the same characteristics – referred to as a fatherhood bonus. Research shows that, rather than declining over time, the motherhood penalty remains stable, controlling for factors such as education and experience”[17]. The motherhood penalty is said to realise when women take a career break, but Mistra and Strader found that this is not the case in the USA, and that the motherhood penalty is more pronounced for white women[18]. Furthermore, the fatherhood advantage is seemingly fueled by employers’ perception of men being the breadwinners. Those who are perceived to be a more likely to be a breadwinner are advantaged through higher earnings[19], compared to men who are not regarded as breadwinners.

HR practitioners should be vigilant for signs of discrimination against women who indicate that they would like to start a family. Furthermore, women should not be placed on the ‘mommy track’ due to employer perceptions that they are not sufficiently ambitious or committed to their jobs. These types of subtle discrimination often surface during selection- and promotion processes. Care should also be taken regarding management’s perceptions of employees who have children, those who are childless, and views about race. The racial aspect receives great attention in South Africa – the other diversity aspects seemingly get very little thought.

Conclusion

Pay inequality is certainly an emotive topic. Money determines, not only the quality of life of women and families, but also their access to opportunities that may positively contribute to their future. The five themes that have been discussed are recurring but not exhaustive. The themes highlight major areas of global research on gender-based remuneration practices. Gender pay discrepancies are fraught with assumptions that cannot consistently be explained by the market model of human capital, as is presently purported. HR practitioners and board members are advised to take heed of the arguments that are presented in this chapter, as major changes can take effect through slight changes in perceptions of leaders about pay.


Bosch, A. (2015). Reasons for the Gender Pay Gap – What HR Practitioners Should Know. In A. Bosch (Ed.), South African Board for People Practices Women’s Report 2015: Equal Pay for Equal Value, pp. 3 – 6. Parktown, South Africa: SABPP.

Copyright © 2015 SABPP and University of Johannesburg. 


[1]Giapponi, C. C. & McEvoy, S. A. (2006). The legal, ethical, and strategic implications of gender discrimination in compensation: Can the Fair Pay Act succeed where the Equal Pay Act has failed? Journal of Individual Employment Rights, 12(2), pp. 137-150

[2]Giapponi, C. C. & McEvoy, S. A. (2006). The legal, ethical, and strategic implications of gender discrimination in compensation: Can the Fair Pay Act succeed where the Equal Pay Act has failed? Journal of Individual Employment Rights, 12(2), p. 147.

[3]Equal Opportunity for Women in the Workplace Agency. (2012). Gender pay gap: The facts, why it is important and what actions can be taken.

[4]Equal Opportunity for Women in the Workplace Agency. (2012). Gender pay gap: The facts, why it is important and what actions can be taken.

[5]  Herald Reporter. (2015). Gender pay gap still remains a reality. 27 April 2015.

[6]Lips, H. M. (2013). Acknowledging discrimination as a key to the gender pay gap. Sex Roles, 68, pp. 223-230.

[7]Travis, M. A. (2014). Gender pay gap: Lessons from the social model of disability. Denver University Law Review, 91(4), pp. 893-923.

[8]Karamessini, & Ioakimoglou. (2007). Wage determination and the gender pay gap: A feminist political economy analysis and decomposition. Feminist Economics, 13(1), pp. 31-66. 

[9]Karamessini, & Ioakimoglou. (2007). Wage determination and the gender pay gap: A feminist political economy analysis and decomposition. Feminist Economics, 13(1), p. 34.

[10]Karamessini, & Ioakimoglou. (2007). Wage determination and the gender pay gap: A feminist political economy analysis and decomposition. Feminist Economics, 13(1), p. 34.  

[11]Karamessini, & Ioakimoglou. (2007). Wage determination and the gender pay gap: A feminist political economy analysis and decomposition. Feminist Economics, 13(1), pp. 31-66.

[12]Agesa, R. U., Agesa, J., & Dabalen, A. (2013). Sources of the persistent gender wage gap along the unconditional earnings distribution: Findings from Kenya. Oxford Development Studies, 41(1), p. 100.

[13]Karamessini, & Ioakimoglou. (2007). Wage determination and the gender pay gap: A feminist political economy analysis and decomposition. Feminist Economics, 13(1), pp. 31-66. 

[14]Morgan, L. A. (2008). Major matters: A comparison of the within-major gender pay gap across college majors for early-career graduates. Industrial Relations, 48(4), pp. 625-650.

[15]Morgan, L. A. (2008). Major matters: A comparison of the within-major gender pay gap across college majors for early-career graduates. Industrial Relations, 48(4), pp. 625-650.

[16]Mistra, J. & Strader, E. (2013). Gender pay equity in advanced countries: The role of parenthood and policies. Journal of International Affairs, 67(1), pp. 27-41. 

[17]Mistra, J. & Strader, E. (2013). Gender pay equity in advanced countries: The role of parenthood and policies. Journal of International Affairs, 67(1), p. 28.

[18]Mistra, J. & Strader, E. (2013). Gender pay equity in advanced countries: The role of parenthood and policies. Journal of International Affairs, 67(1), p. 29.  

[19]Mistra, J. & Strader, E. (2013). Gender pay equity in advanced countries: The role of parenthood and policies. Journal of International Affairs, 67(1), p. 29.