Women, older workers and part-time employees face barriers to pay progression
Employers risk wasting talent by overlooking low-paid employees for career progression opportunities, according to findings from the CIPD.
The report Pay Progression: understanding the barriers for the lowest paid, suggests that working part-time, within a small business or in a low-wage industry is strongly associated with being stuck in low pay once an employee has had this status for more than a year.
The study, in association with John Lewis Partnership, found that in 2011, a quarter (25 per cent) of all UK employees received low pay (around 7 million people), compared to around 15 per cent (4 million) in the 1990s. Over this period, 19 per cent of people in low pay remained ‘stuck’ there.
Of the group examined, 37 per cent were able to escape low-paid work, while around 40 per cent moved in and out of low-paid work.
The definition of low pay for the report, which looked at data from the Office of National Statistics (ONS) and focus groups, was classed as the minimum wage and up to 20 per cent above it.
Of those ‘stuck’ in low pay, the report found that the majority (68 per cent) were women. There was also a correlation between age and low pay, with a person aged 35 being 24 per cent more likely to escape low pay, according to the study, than someone who is 45. Working part-time for more than a year was also found to increase the likelihood of being stuck in a low-paid job.
The study showed that public sector employees were less likely to get stuck on low pay. They had a 7 per cent increased probability of escaping low pay every year.
Private sector employees, however, were more likely to raise their pay by moving to another company than by being promoted, a trend that Kathryn Ray, senior researcher at The Work Foundation said would have direct cost implications for employers: "In terms of recruitment and induction training, which could be better directed to the development and progression of existing staff,” she said.
Evidence from the focus groups suggested part-time employees were afraid to voice dissatisfaction with their pay in case it jeopardised their ability to work flexi-hours.
Peter Cheese, chief executive of the CIPD, said employers needed to focus on the untapped potential of part-time workers. By offering job-sharing opportunities or explicit progression paths for part-time staff, employers may find “untapped reservoirs” of talent and experience within existing teams, he said.
Commenting on the report, The Work Foundation's Ray said it confirmed "a familiar picture that the high share of low-wage jobs in the UK often act not as stepping stones to higher earnings but as dead-ends, with limited pay progression."
The study identified six key ways that staff felt employers and the government could help them move out of low pay, including offering more access to mentoring schemes, free training schemes and more information on how people can better themselves.
“More needs to be done to support and encourage businesses with low-cost/low-value business models to invest in the skills of their staff, for example through peer support and advocacy, incentive schemes and developing managerial capacity in small businesses,” Ray added.
