Changes in working practices due to the pandemic are exacerbating the Gender Pensions Gap

The Covid-19 pandemic is set to make the Gender Pensions Gap much bigger. Just when we thought we were moving in the right direction to close the Gender Pay Gap and the Gender Pensions Gap, huge new crevices are opening up due changing working practices.

Homeworking in the UK: before and during the 2020 lockdown

The Gender Pensions Gap already stands at £100,000 according to the 16th annual Women and Retirement Report published by Scottish Widows (published November 2020). This huge difference in the size of the average man’s pensions pot at retirement compared to the average woman of the same age is appalling. There are many reasons for this, several closely aligned to the reasons for the Gender Pay Gap.

There are also enormous inequalities linked to maternity, divorce and auto-enrolment minimum thresholds, which have an adverse impact on women’s pensions savings.

But I want to flag up the new flexible working and homeworking issues that are exacerbating the Gender Pay Gap and the Gender Pensions Gap – because HR professionals are in a position now to make changes that could mitigate longer term damage to women’s earnings.

An upside of the pandemic has been just how much more acceptable flexible and part-time working has become, allowing people to fit their jobs according to their lifestyles, their most productive working times of the day and so on. However, there is a dark side too – and it tends to hit more women than men. A September poll from Ipsos MORI found half of mothers have taken on more childcare responsibilities because of lockdown, compared to a quarter (23%) of fathers.

We at REBA have seen an increase interest in childcare providers and services such as tutors via workplace benefits. However, we know that good childcare was expensive and in short supply before the pandemic. Add in positive Covid-19 cases and needing to self-isolate, and childcare is still regularly falling back to parents, usually the mother. So, it comes as no surprise that mothers are more likely than fathers to consider going part time from full time – resulting, obviously, in a drop in pay.

Employers may feel that they have no role in employees’ home-life decisions. However, these shifts are impacting the productivity of key groups of employees and will affect an employer’s future talent pipelines and workforce planning.

Professor Alan Felstead of Cardiff University and Dr Darja Reuschke of the University of Southampton re-ran data from their June report looking at Homeworking in the UK: before and during the 2020 lockdown especially for REBA, in order do a gender split to see the difference in impact on self-reported productivity.

In the graph above, readers can see that men (the blue line) are more likely to report that they get more done when working from home, and are less likely to report they get less done. With women (the orange line) it is the reverse; they are more likely to report that they get less done when working from home, and are less likely to report they get more done. The difference between the genders is much more stark if you break it down further into those working at home all the time.

This research didn’t look into the causes of these gender differences, but we do know from the aforementioned Ipsos Mori poll that more women are bearing the mental brunt of the pandemic. They are having to be ‘always on’ to juggle work and multiple responsibilities, and are more at risk of burnout.

The Ipsos MORI poll also found that more women than men feel their work life balance has worsened since Covid-19, and women are under more pressure to prove they are working. In contrast, more men report higher satisfaction with working from home than women do. Interestingly, women say their motivation was higher while working from the office.

Changes in working practices due to the pandemic are exacerbating the gender pensions gap

So, my question to HR and reward professionals is: if a group of employees appear to be slightly less productive that another group of employees, what will happen when it comes to pay review time? How will their bonus targets be assessed? What will happen to their future promotions and career progression?

No wonder 43% of working women are worried about job or promotion prospects according to the Fawcett Society in its Coronavirus Crossroads Equal Pay Day 2020 report published on 20 November.

These seemingly small differentials between gender performance have the potential to play through into pay decisions in nasty ways. Overall, many women are working harder in both their work and personal lives right now, but could face money or career setbacks that many men are less likely to face. Which, in turn, will widen the Gender Pay Gap and therefore the Gender Pensions Gap.

This pandemic is temporary. I do hope employers can see their way to not let temporary circumstances become long term penalties, but to rather put in measures during the pandemic to prevent the increase in these pay and pensions gaps at this crucial time.

What could these solutions look like?

1. Set realistic expectations

Look at setting more realistic expectations and re-evaluate performance criteria to match our new ways of working. This would help relieve the exhaustion that’s particularly affecting certain groups of women.

Employers which are already under financial pressure may find it hard to be generous, but that means it is important to think differently rather than stick to old HR levers that might drive down productivity because of changes in our circumstances.

Make sure any performance management adjustments are well communicated so that all managers act on it and all staff are aware of it.

2. Embrace flexible and part-time working for all job levels

People who reduce working hours are more likely to miss career opportunities. However, there is a great case study that was reported on 17 November from which we can learn a lot. The insurance firm Zurich wanted to tackle its Gender Pay Gap, so a year ago it changed its recruitment policies so that all jobs, no matter how senior, where advertised as flexible. The firm also used gender-neutral language.

The upshot was that Zurich saw a 20% jump in women applying for management roles, and it landed up appointing a third more women to senior roles. Overall, the firm saw more than double the number of male and female applicants for roles giving it a bigger talent pool to select from.

This is a great example of how thinking differently can reap wonderful rewards for a business. But it should also move the dial on their Gender Pay Gap, and one would think, their Gender Pensions Gap.

3. Think differently to spot the problems and new solutions

Thinking differently means involving different people who can spot formerly unnoticed problems and new solutions. The UK watched the incredible impact the footballer Marcus Rashford made with his school lunches campaign in October. He had a different life experience to bring to bear which resulted in a better outcome for so many poorer children.

Currently, when we look at who, especially at government level, are making most of the pandemic recovery decisions, is it an echo-chamber of similar men. This needs to be re-balanced to represent all of society. Maybe the inner circle of the top echelons of government needs reminding that women do make up 50% of the population.

For employers, the question is: are employee voices from all your demographics represented in your business recovery discussions? Or is there a skew towards one particular gender, race and or social class?

We’ll never sort the Gender Pensions Gap if we perpetuate traditional behaviours that favour one group. We need more diverse thinking and more diverse solutions to solve seemingly stubborn problems such as the Gender Pay Gap and the Gender Pensions Gap.

It’s not that women do not know they need to save more, it’s that we have structures in place right now that work against them being able to save more. HR is one seat at the table that can help change that so the Gender Pay Gap and Gender Pensions Gap will close, and not widen in the coming years.

And finally …

We talk about a Gender Pay Gap and a Gender Pensions Gap. But we also have a Gender Data Gap. Too often, women are invisible in surveys and we only see overall default data.

It is important that when HR run data across different segmentations that it is also split by gender across those segmentations.

My favourite book on this is: Invisible Women: exposing data bias in a world designed for men by Caroline Criado Perez. I’m not on commission and I’ve never met her, but I can recommend it as a must read for anyone trying to close gender gaps. One to pop on Christmas lists this year, perhaps?

Without the data, you won’t spot the problem never mind solve it. Ask the gender question in your HR surveys and apply gender splits to your analytics – it really matters!

The author is Debi O’Donovan, co-director at REBA.

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