Three ways the public sector reduces pay gaps

Chloe Chambraud, Interim Business in the Community Gender Director examines the reasons behind the smaller pay gap in the public sector to that of the private sector and asks what public sector interventions business could emulate to create truly fair and inclusive workplaces. 

 

Is the grass greener in the public sector for women? It seemed so when looking at gender pay gaps. In 2016, the gender pay gap for full-time private sector employees was 17% compared to 11% for their public sector counterparts. Meanwhile, whilst it is estimated that the gender pay gap will take 62 years to close, the gap in the civil service has shrunk by 2% since 2010, suggesting equality there will take 37 years. Earlier this year, a systematic review of 98 academic articles confirmed this difference1. So what can businesses learn from this?

There are three main mechanisms which explain why the gender pay gap is smaller in the public sector:

 

  • Agile working arrangements: 65% of public sector employers offer flexitime compared to only 33% of private sector employers. Flexible working practice and quality part-time work explain why 66% of employees in the public sector are women, compared to 42% in the private sector. On average, women in the public sector are also better paid than their private sector counterparts, and 42% of female public sector workers are in high-skilled jobs; in the private sector it’s only 16%.

 

  • Transparent pay and processes: Pay transparency is more common in the public sector, with pay grades, job evaluations and collective bargaining leading to a reduced risk of unequal pay. In many sectors, pay rates are public information2. Additionally, the equitable environment3 - including entrance qualification exams, job grades, and performance appraisal procedures - creates a more objective system to evaluate employee performance4 and enable women’s progression.

 

 

The picture in the public sector is not entirely rosy – between 2008 and 2017, the gender pay gap widened in almost a quarter of government departments or bodies. But there are things that the private sector can learn from it to reduce the gender pay gap. By introducing those mechanisms in their organisations, private sector employers can increase their chances of closing the pay and change organisational cultures, creating fair and inclusive workplaces for everyone.

 

 

 


Sebawit G. Bishu and Mohamad G. Alkadry, “A Systematic Review of the Gender Pay Gap and Factors That Predict It,” Administration & Society 49, no. 1 (2017): 65–104, doi:10.1177/0095399716636928.

[2] Stuart, Mark B. (2014), Why is the Gender Pay Gap Higher in the Private Sector?

[3] Kaufman, R. L. (2002). Assessing alternative perspectives on race and sex employment segregation. American Sociological Review, 67, 547-572.


[4] Bishu and Alkadry, “A Systematic Review of the Gender Pay Gap and Factors That Predict It.”

[5] Balcik, B., Iravani, S., & Smilowitz, K. (2010). A review of equity in nonprofit and public sector: A vehicle routing perspective. In J. J. Cochran (Ed.), Wiley ency- clopedia of operations research and management science, pp 1-12. Chichester, UK: John Wiley.

[6] Llorens, J. J., Wegner, J. B., & Kellough, J. E. (2008). Choosing public sector employ- ment: The impact of wages on the representation of women and minorities in state bureaucracies. Journal of Public Administration Research and Theory, 18, 397-413.