Business, Innovation and Skills CommitteeWritten evidence submitted by Dr Sue Johnson

I am responding to this call for evidence in a personal capacity.

1. Do the Gender Equality Duty and the Equality Act go far enough in tackling inequalities, such as gender pay gap and job segregation, between men and women in the workplace?

1.1 No.

1.2 The fact that the gender pay gap still exists and that it was necessary for the Equality Act to still contain the so called sex equality clause to legislate for equal pay, more than 40 years after legislation to outlaw it was originally introduced, is a sorry indicator of the failure of equal pay legislation to date.

1.3 In March 2012 the Office for National Statistics reported a gender pay gap of 10.4% for the UK as a whole.1 The gender pay gap between full time male workers and part-time women workers at that time was substantially higher at 39.4%. In London the gap was even higher at 43.9%.

1.4 There is nothing in the Equality Act to specifically tackle job segregation between men and women in the workplace other than perhaps the public sector gender equality duty (PSED). Even then it depends on each public body interpreting the PSED as relating to job segregation. There is no requirement as such for them to interpret it in this way. The duty anyway, does not compel public sector bodies to tackle inequalities, it only requires them to give due regard to equality. The EHRC has never had enough capacity to “police” all of the 40,000 or so public bodies in GB, so public bodies do not feel they run much of a risk if they do not comply. There is nothing at all in the Act to steer the private sector towards tackling job segregation.

1.5 Job segregation is still very prevalent. There is only an average of one to two% of women in manual trades, 11% in skilled trades2 and 34% amongst managers and senior officials. Only 1.8% of taxi drivers in London were women at the end of March 2011; just over five% of fire fighters, just over 10% of underground train drivers and only 24% of police officers in London were women.3

1.6 Women are also under-represented in top jobs and amongst people running businesses. In November 2012, 17.4% (191 out of a total of 1,098) of the directorships of the FTSE 100 companies were held by women.4 While the proportion is increasing, the pace of change is slow. 8% of FTSE 100 companies and 80 (32%) of FTSE 250 companies still have no women on their boards.

1.7 Furthermore there is underrepresentation of women as business owners. Although there is no recent data, a 2007 report found that only 16% of businesses in London could be categorised as women-owned.5 ^, 6

1.8 Many women are still in lower paid jobs as cleaners, cashiers, carers and clerical workers In London, the occupation with the highest proportion of women is in personal services, where they make up 80% of all those in employment, followed by administrative and secretarial jobs (70%) and 54% of those employed in sales and customer services.7

1.9 Men are also under-represented in certain occupations. For instance, less than 14% of teachers in nursery and primary schools in England are male8 and two% of day nursery staff9.

1.10 If we want the Equality Act to enable a reduction in the level of job segregation it, perhaps through the Gender Equality Duty, would need to be amended to make the need to tackle job segregation a specific requirement. The public sector equality duty could also need to be strengthened to ensure that public bodies take action, rather than just “pay due regard”.

1.11 Job segregation also occurs in the private sector. If the Equality Act and the Gender Equality Duty are to play a role in tackling the gender pay gap and job segregation, then the government should enact s78 of the Equality Act and extend the gender equality duty to the private sector.

2. What steps should be taken to provide greater transparency on pay and other issues, such as workforce composition?

2.1 The PSED has been a positive for driving those public bodies, who were not already publishing data on their workforce composition by gender and other diversity measures, to do so. The Think, Act, Report initiative and the Financial Reporting Council’s Corporate Governance Code new diversity reporting requirements have been welcome steps for encouraging greater transparency and activity on pay and workforce composition inequalities in the private sector.

2.2 Whilst the Think Act Report’s annual report has shown some progress, it is still slow. The Equality Act (s.78) allows the government to bring in legislation to require all companies with 250 employees or more to report their gender pay gap. The government needs to be transparent about when and how it will ascertain that the voluntary approach is not leading to fast and wide enough progress and under what circumstances it would be prepared to enact s78. This may, of itself help to drive the voluntary process.

3. What has been the impact of the current economic crisis on female employment and wage levels?

3.1 There has been a rise in the employment gap between men and women. In the year ending June 2011, the employment rate of women in London was 60.6%, compared with 75.4% for men. This gap of 14.8 percentage points, was an increase on the previous year’s gap of 13.5 percentage points.10

3.2 Women’s unemployment has risen. In March 2012 figures from the Office for National Statistics showed women’s unemployment standing at 1.13 million—the highest figure for 25 years. Fawcett Society calculations suggested that, female unemployment had increased by almost 20% (19.1%—from 945,000 to 1.13 million) between the end of the recession in 2009 and March 2012. Whilst, although it has fluctuated in the intervening years, the unemployment rate for men stood, in March 2012, almost exactly where it did at the end of the recession in 2009 (where it has increased by 0.32%—from 1.53 million to 1.54 million).11

3.3 The CIPD April 2012 Age, gender, and the jobs recession Work Audit reported that, compared with early 2008, women accounted for a larger share of total long-term unemployment (up from 31% to 36%) by the start of 2012 and that the share of women who are long-term unemployed had increased in all age groups.

3.4 The cuts in public sector jobs, in which women disproportionately work has led to large numbers of women losing their jobs. In November 2012 it was reported that more than 6,000 nursing posts had been lost in England since May 2010, most of whom will be women.12 Over 56 thousand NHS positions across the UK are due to be cut13

3.5 In 2011 women accounted for 100% of those losing their jobs in 19 councils in England and Wales, 76% of local councils in the South East and 60% of London councils.14

3.6 Cuts in public sector jobs in London seem to be having a disproportionate impact on black, Asian and ethnic minority (BAME) women. A survey of 17 out of 27 local authorities in London found that BAME women were being disproportionately hit in 12 London councils. In one council BAME women made up 5% of the workforce but made up 23% of redundancies.15

3.7 There have also been particularly high job losses amongst women in administrative, secretarial, sales and customer services roles, all of which are traditional female occupations. 400,000 such jobs were lost between the start of the recession and the start of 2012.16 With women being over-represented in the retail industry, the continuing closure of high street shops is bound to continue to have a detrimental impact on female employment.

3.8 With the high level of job losses and low level of job opportunities people are taking whatever jobs they can and accepting positions with lower skills than they are qualified for, or are accepting lower pay or hours of work than they had previously enjoyed or want.

3.9 Women make up 75% of the local government workforce.17 Due to the pay freeze and the impact of inflation, typical full-time hourly earnings in local government have dropped down back to the levels of the early 1990s and pay for those on low salaries is at poverty level.18

3.10 At the end of August 2012 8,129,000 people were working part-time, the highest level since records began in 1992. This represented 27.5% of all those in employment, which was also a record.19 The level of temporary workers was at its highest since the beginning of January 2002.

3.11 There have been substantial rises in the number of people in involuntary part-time work and involuntary temporary work since 2008. In August 2012, 1.4m people were in part time work because they could not find full time work and 649,000 were in temporary work, because they could not find permanent work.20 The numbers of women who are involuntary part-time work are greater than those of men and are increasing.21

4. How should the gender stereotyping prevalent in particular occupations, for example in engineering, banking, construction, and the beauty industry, be tackled?

4.1 In 2010 the former UK Resource Centre for Women in Science, Engineering and Technology (UKRC) reported that only 5.3% of working women were employed in the SET sectors, compared with 31.3% of working men.22 The BITC Diversity Benchmark Survey which took place in 2012 found 25% of employees below management level in SET and Mathematics Industries were women.23 The percentage was lower at the higher levels.

4.2 The government has significantly reduced funding to organisations such as the former UKRC, which were dedicated to tackling under-representation of women in science, engineering, technology and the built environment. The government should reconsider the wisdom of this and how likely it is that significant change in these sectors will be achieved without such organisations and sufficient levels of resourcing.

4.3 As regards the construction industry, the government could use the Women in Construction initiative, which led to the percentage of women working for contractors on the Olympic Park being about double of the construction industry as a whole, as a model for at least all government funded major construction and infrastructure projects.24 It could also promote the Women in Construction initiative across all of the construction industry.

4.4 Women are increasingly working in professions that were denied to them in the past. They make up, for instance, 46.5% of solicitors with practising certificates25 and 43.2% of all doctors registered in the UK.26 Consideration could be given as to what it is about these higher paid occupations that have succeeded in attracting and employing increasing numbers of women and see how any learning can be applied to the engineering, banking and construction industries.

4.5 The government’s drive to increase the number of apprenticeships is welcome. It is also pleasing to see that the number of women doing apprenticeships has been rising and make up 50% of those on apprenticeships. This provides an opportunity for both men and women to move into occupations that are not traditional for their gender. Unfortunately the evidence seems to suggest that this is not happening. For example in 2011 only 5% of 49,000 engineering and manufacturing apprenticeships were taken up by women.27Without greater intervention it will take at least 50 years at current growth rates for there to be an equivalent proportion of male to female apprentices. Furthermore, research has found that the increase in women doing apprenticeships has, in large part, been due to the expansion of apprenticeships into sectors with a large female workforce, such as retail and business administration.28

4.6 People who start their working life on low earnings are likely to be low earners throughout the rest of their working lives.29 Unesco’s 2012 Education for All Global Monitoring Report reported that female apprentices in the UK earn 21% less on average, than their male counterparts, while doing their training. The Women’s budget Group’s 2011 report reported that 97% of engineering apprenticeships—which paid around £189 a week –were being are done by men, whereas 92% of hairdressing apprenticeships—which paid around £109 a week—were being done by women.30 Efforts to increase both young men and women’s take up apprenticeships in gender atypical occupations will not only have a positive impact on tackling gender job segregation but also on closing the gender pay gap.

4.7 Over the years efforts have been made and there has been success in increasing the proportions of men and women in occupations that are atypical for their gender. Where there are job losses in these fields there should be careful ongoing monitoring by gender of these workforces to ensure these hard won gains are not lost as jobs are shed. Where monitoring or equality impact assessment show that there is a possibility of this occurring, timely interventions should happen to prevent it.

5. What more should be done to promote part-time work at all levels of the workplace and to ensure that both women and men have opportunities to gain senior positions within an organisation while working part time?

5.1 Employers should recognise that 2 part-timers filling one post can bring a wider set of skills, knowledge and experience, than one individual can.

5.2 All vacant full-time posts should be advertised as open to jobsharers. There should be no expectation on any candidates applying as a job-sharer to apply with a job-sharer. The application process should make it clear that the employer will take responsibility for filling the remaining portion of the post.

5.3 Employers should ensure that their staff are aware of their right to request flexible working and promote the organisations commitment to granting such requests as far as possible.

5.4 Employers should promote part time working to their workforce and respond positively to requests from staff to work part-time regardless of the reasons for the request.

5.5 Employers should not make an assumption that someone working part time is not interested in developing their career and progressing up the organisation.

5.6 Employers should encourage their part-time staff to take up professional development opportunities and promotion and make it know to the wider organisation that it is doing this. This will alert staff to the fact that part-time working is not an impediment to being able to progress within the organisation.

5.7 Staff in senior positions, especially men, should work part-time to demonstrate to the workforce that working part-time is perceived by the employer as a seriously recognised work pattern and also provides no detriment to career progression.

5.8 Senior staff approaching retirement could be encouraged to work part time as a step towards retirement, with the employer making the hours given up available to enable lower ranking part-time staff the opportunity to move up. Where appropriate there could be a mentoring relationship between the outgoing member of staff and the upcoming member of staff.

6. To what extent have the recommendations in Lord Mervyn Davies’ Report “Women on Board” (published in February 2011) been acted upon?

6.1 It is difficult to tell as there has been no further comprehensive reporting on progress against the whole of the recommendations since March 2012. Certainly there has been progress with the amendment’s to the Financial Reporting Council Corporate Governance Code having been made and the EHRC having published its recommendations on improving the process of appointing to boards and the Role that Executive Search Firms can have in the appointments process.

6.2 We still do not know whether the aim for a minimum of 25% female representation on FTSE 100 boards by 2015 is on track. Presumably another annual report against the recommendations is imminent.

7. To what extent should investors take into account the percentage of women on boards, when considering company reporting and appointments to the board?

7.1 If companies wish their organisations to be reflective of the views of the population that the company serves, to be confident that they are drawing from the widest possible talent pool and to have the widest range of views brought to board meetings then they should want to see boards made up of 50% of women.

7.2 Despite the recession, an increasing number of respondents to McKinsey’s surveys believed there was a direct connection between a company’s gender diversity and its financial success, with 72% believing this in the survey whose results were published in 2010.31

8. Why are there still so few women in senior positions on boards, and what are the benefits of having a greater number?

8.1 There are a number of reasons why there are still so few women on boards.

8.2 One is the historical legacy of men being traditionally appointed to such positions.

8.3 In order for new people to get onto boards there needs to be positions available. Whilst most companies make at least some new appointments each year, a number recommend that the incumbent is reappointed.

8.4 Some men will need to be willing to step down to allow women to be able to step forward.

8.5 Women’s talents and skills are not recognised and valued enough. SHL measured the leadership potential of over a million employees across 25 countries and concluded that, while leadership potential is actually higher in women, the gender difference in senior positions globally is 76% in favour of men.32 Of the 25 countries, UK women ranked fifth in the world for leadership potential, but 19th for leadership roles held by women. Men tend to be motivated by a desire for power, whilst women tend to be motivated by a desire for recognition. The authors of the SHL Talent Report advised that, to be more attractive to potential female leaders, boardroom culture needs to shift from one framed by fear of failure to one founded on recognition for contribution and performance.

8.6 Some women will lack confidence that they are suitable to sit on boards.

8.7 Some women will not have been given sufficient development or experiential opportunities that will equip them to take on these roles.

8.8 A number of women who have made it into senior positions have done so by either sacrificing their opportunity of having children or have nannies or partners who have taken on the role of parenting their children, which has enabled the woman to be able to have the time to concentrate on her career and its development. It is not desirable for all women to have to choose these options in order to be able to make it to senior positions; neither does it serve companies well to not have the voice and talent of women who have parented children at the board.

8.9 The extent to which women have to travel, the amount of time over and above their other commitments they have to spend and the time of day that meetings take place also have a bearing on why some women will not wish to put themselves forward to become board members.

8.10 Research carried out by McKinsey of large European companies has found that those with the highest percentage of women show the best performance.33These reflect findings from other parts of the world.34

8.11 As indicated in paragraph 7.1 above, the benefits of having more women on boards are that companies can be assured that they are drawing from the widest possible talent pool. Why would a company want to disregard half of the potential pool? It also ensures that the widest range of views will be brought to board meetings and that these views will be reflective of the opinions of all of the population that the company serves. McKinsey’s more recent reports focus on ways of achieving greater gender diversity on boards.35

9. How successful is the voluntary code of conduct (a recommendation of the Davies Report) which addresses gender diversity and best practice, covering relevant search criteria and processes relating to FTSE board level appointments?

9.1 BIS reported that there were 34 Executive Search Firms signed up to the Voluntary Code of Conduct, addressing gender diversity and best practice in search criteria and recruitment processes to FTSE 350 boards, by July 2012.36 This was good progress in a year. www.allheadhunters.co.uk lists 88 UK Executive Search Firms, so there is still some way to go.

9.2 As well as moving towards all the relevant Executive Search Firms signing up, BIS also needs to monitor that those firms that have signed up are actually adhering to its provisions and action is taken where they are not doing so.

21 January 2013