Radical change needed to tackle gender pay gap in procurement

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With the increased focus on inclusion and equality in recent years, it would be easy to assume that the gender pay gap is shrinking – even if it is at a snail’s pace. Yet the results of the Procurement salary survey 2020 suggest the opposite is true in the function.

 

Procurement Leaders asked 1,000 procurement professionals around the world what they earn and found that the average woman earns just 71% of the combined salary and bonus paid to the average man.

 

That figure is down from 76% two years ago and, in fact, it is at a similar level to when the we first carried out the research back in 2013.

 

The average man working in procurement earns $35,941 more each year than the average woman.

 

These worrying figures come despite high-profile efforts by some employers to promote gender diversity and the fact that women in procurement have, on average, spent longer in the workplace than men.

 

The disparity appears to be because of a glass ceiling in the function, as fewer women rise to the most senior leadership positions.

 

Almost half of buyers are women and they earn, on average, roughly 10% more than their male peers. However, that trend is reversed substantially when women progress beyond the regional category manager level.

 

Less than 15% of the CPOs and global procurement heads who responded to the survey are women and they take home less than one-third of the total their male counterparts earn, on average. This stark difference and lack of progress shows that more radical action is needed if the procurement community wants to have any hope of closing the pay gap.

 

Boosting gender diversity delivers benefits

While most people consider the lack of women at senior levels to be a moral issue, there is a compelling business case for improving diversity.

 

Studies repeatedly show that diverse teams with a wider variety of life experience are better at problem-solving and innovation. Research by McKinsey found that companies in the top quartile for gender diversity were 15% more likely to outperform their peers financially than those in the bottom quartile.

 

CPOs often say finding the right staff is one of their biggest challenges. In fact, according to research carried out for PL’s 2020 CPO Planning Guide, just one-fifth consider recruiting and retaining talent an easy task. As such, companies that fail to make themselves attractive to female candidates are effectively shutting themselves off from half of the available talent pool.

 

Procurement Leaders encourages leaders to take radical action to promote change in 2020 and move beyond vague intentions. Top talent is essential if your team is to become a progressive, value-creating, business-centric function. Here are some steps you can take to get the ball rolling:

 

Understand your diversity strengths and weaknesses

Procurement Leaders’ Gender Diversity Checklist is a good starting point for assessing how much concrete action your business is taking to promote women in the procurement function. It covers areas such as board representation, diversity training, recruitment and pay to help identify other steps could be take to drive change.

 

Make it easier to go on – and return from – maternity leave

The fact child-rearing responsibilities still tend to fall disproportionately on mothers has been identified as a key factor preventing women from moving up the corporate ladder. Those who go on maternity leave can often feel like their organisation has left them behind when they return to work.

 

Diversity-conscious employers should ensure women are supported in taking the time off they need, as well as hit the ground running when they return. “Returnship” programmes, which cater for those who have taken longer career breaks for childcare, can also help businesses tap into a more diverse pool of talent.

 

Organisations can also do their bit to redress this societal imbalance by offering and encouraging fathers to take longer periods of paternity leave.

 

Invest in unconscious bias training

While most of us like to think of ourselves as being supporters of a diverse workplace, research shows that the majority of people are guilty of unconscious bias. That means they tend to react more positively towards people of a certain age, race or gender without realising it.

 

The fact this occurs subconsciously means it can be far more difficult to tackle than more overt forms of prejudice, but there are some steps businesses can take.

 

Asking staff to take part in simple online tests, such as this implicit association from Harvard University, can help them understand the internal biases they don’t realise they have. Some training providers also offer more formal courses.

 

Our Women Procurement Leaders Community

Procurement Leaders members have access to the Women Procurement Leaders (WPL) community, a group of members who are focused on championing gender diversity within procurement. WPL aims to drive progress through a mentoring scheme, live events and thought leadership. If you want to get involved, please email WPL.

 

Jack Torrance
Posted by Jack Torrance

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