Using Procurement to Address Gender Pay Inequality
Gender pay inequality, or the gender pay gap, refers to the difference in earnings between men and women in the same occupation or job. It is a pervasive issue that results from various factors such as gender discrimination, occupational segregation, and the undervaluing of female-dominated jobs. The persistence of this issue has severe consequences for women’s lives and the economy as a whole, including reduced lifetime earnings, lower retirement benefits, and increased poverty rates among women. Although progress has been made, gender pay inequality remains a significant problem across many industries and countries.
One way to address gender pay inequality is through the use of procurement policies and practices. Procurement can be a significant lever for change, as it can influence how suppliers operate and help create more equitable supply chains. By incorporating gender equality considerations into procurement practices, organisations can support women’s economic participation and ensure the creation of fair workplaces and supply chains.
Acknowledging the problem of gender pay inequality
The first step in addressing gender pay inequality is acknowledging its existence and the significant impact it has on women’s lives and the economy. In most countries, women earn less than men, and this pay gap is even wider for women from marginalised communities and women of colour. This issue is not just limited to the workplace but also affects women throughout the supply chain. Women are involved in every step of the supply chain, from sourcing raw materials to manufacturing and delivering the final product. Yet, they often receive lower pay and fewer opportunities for advancement than men.
When women are paid less, it impacts their ability to support themselves and their families, perpetuating systemic poverty and inequality. One example of gender pay inequality in the supply chain is the coffee and cacao industry. In many countries, female farmers are responsible for most of the labour involved in coffee and cacao farming. Yet, they are paid less than their male counterparts and are less likely to own their land or have access to credit. For example, a report by the African Development Bank found that while women cocoa farmers in Côte d’Ivoire, one of the world’s largest cocoa producers, account for 68% of the labour force, they receive only 21% of the income. Women also face limited access to training and resources, limiting their ability to improve their farming practices and increase their yields.
The gender pay gap not only perpetuates poverty and inequality for women but also has negative consequences for industries as a whole. When women are not paid fairly, they are less likely to have the resources to invest in education and healthcare, limiting their potential and contributing to a less productive workforce. Although many companies have started implementing initiatives and policies to address this issue, more work needs to be done to ensure that women throughout the supply chain are paid fairly and have equal opportunities.
The role of procurement in addressing gender pay inequality
Procurement can be used as a powerful tool to address gender pay inequality. As part of their responsible sourcing policies, companies can work to ensure that their suppliers and partners pay fair wages to women and men and that women have equal access to resources and training. For example, a company can require that its suppliers implement fair labour practices and provide equal pay to women and men. They can also work with suppliers to identify and address gender-based workplace discrimination and violence and promote diversity and inclusion in their workforce and leadership positions. Thus, by incentivising suppliers to improve their labour practices and adopt more gender-inclusive policies and practices, and prioritising gender equality in procurement policies, companies can create more equitable and sustainable supply chains that empower women and promote economic development.
The business benefits of addressing gender pay inequality through procurement
By utilising procurement as a means to address gender pay inequality, companies not only promote fairness and equality but also stand to benefit in several ways, as it can lead to:
- Better reputation as a socially responsible company: Consumers and stakeholders increasingly expect companies to demonstrate their commitment to social responsibility and sustainability. By addressing gender pay inequality through procurement, organisations can demonstrate their commitment to promoting gender equality and fairness, enhancing their reputation and brand value.
- Attracting and retaining top talent: Women comprise half of the global talent pool, and companies prioritising gender diversity and equality are more likely to attract and retain top female talent. By promoting gender equality and pay equity through procurement, companies can create a more attractive work environment for women, which can help them to compete for top talent.
- Creating a more inclusive and equitable work environment: By supporting women-owned businesses and promoting gender diversity and equity, companies can create a more inclusive and equitable work environment. This can lead to improved employee engagement, job satisfaction, retention, and a stronger sense of community and shared purpose among employees.
- Enhanced supply chain resilience: Gender inequality in supply chains can lead to higher turnover rates and lower employee retention, which can impact the stability and resilience of a business’s supply chain. Addressing gender inequality can help ensure a stable and reliable supply chain over the long term.
Practical steps for incorporating gender pay equality into your procurement policies
Companies can take several practical steps to incorporate gender pay equality into their procurement policies.
- Conduct a gender pay gap analysis: Before developing any procurement policies related to gender pay equality, companies should analyse the extent of the gender pay gap within their supply chains. This can help identify areas where action is most needed.
- Develop supplier diversity programs: Companies can develop supplier diversity programs that prioritise working with women-owned or led businesses and those that demonstrate a commitment to gender pay equality and fair labour practices.
- Include gender pay equality requirements in procurement contracts: Companies can include gender pay equality requirements in procurement contracts with suppliers, such as mandating equal pay for equal work and ensuring that women have equal access to training and development opportunities.
- Monitor and enforce compliance: Companies should regularly monitor their suppliers’ compliance with gender pay equality requirements and take action when non-compliance is identified. This can include penalties for non-compliance, termination of contracts, and working with suppliers to develop improvement plans.
In conclusion, addressing gender pay inequality through procurement is essential to achieving gender equality and creating a more inclusive and equitable future. By acknowledging the problem, recognising procurement’s role, and taking practical steps to incorporate gender pay equality into procurement policies, organisations can contribute to closing the gender pay gap and promoting economic opportunities for women.