Scotland loses top spot in league of working women

Claire Reid, Regional Leader for PwC in Scotland

Scotland has lost its top spot as the best place in the UK for working women, overtaken by the South West of England, Northern Ireland and Wales, respectively.

The country has slipped down to fourth in the rankings on an index compiled by consulting giant PwC, which published its findings just days ahead of International Women’s Day on Sunday.

In 2018 Scotland saw declines in four of the five indicators, with the only improvement being in narrowing the gender pay gap.

Having set a high bar, Scotland’s position at the top of the Women in Work Index has been impacted by marginal declines across four of the five indicators used to compile the report, while all other parts of the UK improved their scores.

Between 2017 and 2018 Scotland’s performance declined very marginally on all indicators with the exception of the gender pay gap, leading to a 2% reduction in its overall score.

Given the small margin of decline, the movement at the top of the Index is more driven by English regions and other devolved nations seeing more rapid improvements over this period. Competition at the top of the index is close, and these improvements in other regions were enough to knock Scotland off the top spot.

However, of the 12 nations and regions measured for the Index, Scotland was the only one that saw a fall in overall score.

The South West of England jumped ahead of Scotland to take the top spot, having improved on all five indicators measured for the Index, with Northern Ireland and Wales also pushing ahead to take second and third places respectively.

The labour force participation level in Scotland dipped marginally between 2017 and 2018, from 73.5% to 73.3%. That was enough for Scotland to fall from fourth to fifth in this measurement. In addition, the gap in male and female labour force participation rates increased from 8.1% vs 8.5%.

The female unemployment rate increased from 3.6% in Scotland in 2017 to 4% in 2018, while the female full-time employment rate slipped from 58.74% to 58.68%. Overall employment figures in Scotland for the period show the employment rate was 74.1 per cent, down 10 base percentage points, indicating that there is no gender bias in the fall of the number in employment.

Official data shows that in 2018, a total of 52,000 women were unemployed in Scotland, increasing by 5,900 since 2017, leading to an unemployment rate for women of 3.9% – in line with the total unemployment rate, therefore Scotland’s performance in the Women in Work Index can directly be linked to an overall drop in employment.

Scottish Government figures for the same period, show part-time employment accounts for 42.5% of all women’s employment compared with 13.1% of all men’s employment, while women’s share of self-employment fell 2.5 percentage points to 32% between 2016 and 2018.

The one indicator where Scotland continues to make improvements is in the gender pay gap. The country recorded 15% in 2018 compared with 16% in 2017. However, that was only good enough for third place in the table – behind Northern Ireland and Wales, but ahead of all nine English regions, and ahead of the 18% UK average.

Initiatives such as Tech She Can, an industry-wide plan to encourage more women to take jobs in technology, have the potential to further reduce the gender pay gap given the relative earnings potential of such skilled labour.

Claire Reid, Regional Leader for PwC in Scotland, said: “While it’s disappointing to see Scotland lose top spot in this year’s Women in Work Index, we must remember that we have set the standard in gender equality in the workplace and we are now seeing other parts of the UK respond to that.

“It is hugely encouraging to see Scotland’s gender pay gap improve, moving us up to third place in this important indicator. Overall, what this year’s Index shows us is that the work cannot stop, and in fact must gather pace. Although there are a number of factors that have led to the reduction of Scotland’s Index score, what is clear is that organisations need to continue to work on building inclusive cultures which provide women with the same opportunities as men. 

“There is a requirement for change, led by business and government together, to increase focus on supporting the female talent pipeline. This should begin at school age and continue through women’s careers to close the gender pay gap. To improve the Index score in future years, there must also be increased support for flexible working for all genders to reduce the balance of caring responsibilities being placed on women, along with childcare and social care solutions that enable women to participate more in the workforce.”

Much like Scotland being overtaken by other parts of the UK, the UK itself is being outpaced by greater improvements in female employment prospects in other OECD countries, according to the Index, which analyses female economic empowerment across 33 OECD countries.

While the UK performs above the OECD average and is second only to Canada when compared to other G7 economies, its position has barely budged since 2000 when it stood in 17th position, despite improving its performance across all five indicators. This year the UK has retained 16th place.

Overall, the OECD countries achieved incremental gains to female economic empowerment. Iceland and Sweden retain the top two positions for the fifth year in a row, with Slovenia in third place. Czechia experienced the biggest improvement in its ranking of all OECD countries, rising four places from 23rd to 19th, whereas Estonia and Ireland recorded the biggest decline.

On average across the G7, women account for only 30% of the tech workforce, and even fewer women occupy the top echelons of tech companies. According to PwC’s Women in Technology Index, which is part of Women in Work, Canada is the best performing country within the G7 in terms of gender representation and equality in the tech sector, with France in second place.

The outlook is less rosy for the UK. In contrast to the main index, on which it is the second-best performing country in the G7 and ranks in the top half of the OECD overall (16th), the UK is fifth out of the G7 in the Women in Technology Index. Its poor performance is driven by worse than average performance on all indicators except the share of women on boards in the technology, media and telecoms (TMT) sector.

Laura Hinton, chief people officer at PwC UK, said: “Technology is front and centre for businesses and wider society, so it’s vital we take steps to make the industry as inclusive as possible. It’s encouraging to see progress being made in opportunities for women across the UK as businesses invest across the country, but more needs to be done. 

“Long-term, targeted solutions will be vital in making changes sustainable. We know that in areas such as STEM women are under-represented. In order to build and sustain a pipeline of diverse talent, businesses need to work together to encourage girls at young ages through initiatives such as Tech She Can – a programme which inspires and educates young women to get into tech careers.”

The study indicates that AI and new technologies, such as robotics, drones and driverless vehicles, could displace jobs for women, but can also create new ones. Fewer female jobs are expected to be lost due to technology relative to jobs lost for the male population in the OECD, but the gains from job creation are likely to be bigger for men than women. The health and social care sector, the largest employer of women in the OECD, is expected to experience a net increase in female employment as a result of technology. However, the wholesale and retail trade and manufacturing sectors in the OECD are expected to experience a net decrease in female employment as a result of technology.