The cost of living, gender pay inequality and the talent gap

Clear evidence of increasing gender pay inequality

One of the commitments that make liberal democracies some of the most desirable countries in which to live and work is gender equality. Such nations attract people from all over the world, especially those that are escaping nations where there is a cultural bias towards gender inequality.

However, the cost of living crisis is increasing gender pay inequality within developed liberal democracies.

In the US in 2023, it was found that women are only earning 77 cents for every dollar earned by white men. Essentially, this means the US gender pay gap has remained at or around this level for over 20 years.

Data from the World Economic Forum posted in January 2023 shows that in the UK in 2022, women on average took home £550 per month less than men.

And in Australia, the Workplace Gender Equality Agency WEGA is the government body that helps to promote and improve gender equality in the workplace. It found that an average weekly shop of $151 equates to 8.1 percent of the average man’s salary. However, for an Australian woman, it equates to 9.4 percent.

A toxic mix impeding business success and economic growth

There are two main reasons behind the increase in this inequality. Firstly, women are more likely to be in low-paid jobs and to work in part-time jobs, which typically pay less than full-time jobs. They are also more likely to work in low-paid sectors such as care, retail, and hospitality.
Secondly, they are more likely to have caring responsibilities, which makes them more vulnerable to the effects of rising prices. Women are more likely to be responsible for childcare and other caring responsibilities, which can take up time and energy that could be used for paid work.

With women unable to earn as much money as men, this is increasing the gender pay gap, and as a consequence, women are more likely to be struggling financially than men.

The problem for recruiters and employers is that gender pay inequality may be contributing to the talent gap by making it financially unviable for women to return to the workplace post-Covid or by discouraging their ambitions for seeking promotion. The cost of living crisis, gender pay inequality and the talent gap are a toxic mix that may be directly impeding economic growth and the success of individual businesses.

How recruiters and employers can help close the gap

While the governments of liberal democratic nations may legislate for equality, it requires individual businesses and organisations to actually make it happen. Recruitment agencies and employers have a pivotal role to play in reducing gender pay inequality and the influence it may be having in contributing to the shortage of workers. Some key action points include:

• Be gender-neutral: Use gender-neutral language in job descriptions, advertisements, and interview questions and avoid unconscious bias in the recruitment process.
• Equal pay for equal work: Pay women and men the same amount for doing the same job, and ensure women are not being paid less than men for doing similar jobs.
• More flexible working: Allows women to better balance their work and family responsibilities by being able to fit full-time work responsibilities in with personal commitments.
• Promoting gender equality: Create a cultural workplace shift by providing training on unconscious bias, creating a culture of inclusion, and celebrating women’s achievements.

To help more directly address the problem of the cost of living crisis, recruitment agencies and employers can also help by:

• Financially assisting employees: This might include offering financial planning advice or providing payments as loans or bonuses to help employees cover the cost of living.
  Policy support for gender equality: Support increases in the minimum wage, provide paid family leave or make childcare more affordable.

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