London’s Pay Gap Is Falling Down—Just Not Fast

Like many governments around the world, the city of London is pushing to narrow the pay gap between its male and female employees. But new data shows how complex the issue can be, for both public and private sector leaders alike.

Overall, the city, which employees more than a half million people, is making headway. On average female city workers earned 4.8% less than men in March 2018, down from 6.1% a year earlier. However, that isn’t much solace for the women who work for the city’s mass-transit division. At Transport for London, women made 21.5% less than men, a widening from the 19.7% gap in March 2017. “It does not make for comfortable reading,” said London Mayor Sadiq Khan, who called for more action to address the problem.

The issue, of course, has gained attention far beyond the public sector. Last year, all organizations in the United Kingdom with more than 250 firms had to publish pay gap figures. In 2017, male full-time employees were paid, on average, 9.1% more than female full-time employees. The question is, what’s the fix?

The solution isn’t obvious. “You don’t fix the gender pay gap by fiddling around with pay,” says Mark Quinn, Korn Ferry’s head of rewards and benefits, for Europe, Middle East, and Africa. That might sound counterintuitive, but experts say much of the gender pay gap is a product of men and women not being equally represented at all levels of an organization. In London, much like many other places worldwide, the roles that women hold don’t pay as well as well as those that men do.

Increasingly, experts have been saying the best approach is to focus on women climbing the corporate ladder as fast and frequently as men. “You want policies that help to foster careers for women,” says Quinn. That includes rethinking the way in which people get chosen for jobs, particularly senior positions. Often promotions in professional jobs heavily favor people with more on-the-job experience, explains Mark Thompson, a Korn Ferry senior client partner for the UK and Ireland.

A broader and more diverse bench of employees will also help address gender pay gaps over the coming decades. It gets to an important question that top executives must answer: “Are we building the team for the long term?” says Thomas McMullen, a senior client partner based in Korn Ferry’s Chicago office. “Are we doing things at the base level, at college recruiting programs, and so getting a more diverse slate of employees?”

One organization that has already distinguished itself in similar matters is the United States military, McMullen says. America’s armed forces was at the forefront of racial integration, and more recently they have opened many non-traditional military roles to women, including those in combat. “There are lessons to be learned for officer training about getting things done through working with people,” he says.

The good news is that government-mandated transparency on gender pay differences can help drive change. The bad news is that the necessary change won’t happen instantly. “Companies didn’t get into these difficulties overnight, and they aren’t going to get out of them overnight,” says McMullen.