UK's gender pay rankings will put discrimination under spotlight
Britain’s gender pay gap has refused to close for years. At 9.4% in 2016, the difference between average pay for male and female full-time employees was little changed from the 10.5% gap five years earlier.
The gap for all employees, full-time and part-time, has been coming down but was still 18.1% in 2016. That gulf reflects the fact part-time workers – both men and women – earn less on average per hour than their full-time counterparts and a much higher proportion of women work part-time.
Yet ask big employers about where the gap has come from and they will inundate you with information about their firm’s diversity schemes, mentoring programmes and parental support. Everyone says they are doing something, and yet here we are. Women still earn significantly less than men on average and progress is laughably slow. One analysis, by consultants Deloitte, estimated that at this pace the pay gap will not be eradicated until 2069 – or 99 years after the Equal Pay Act.
UK gender gap data
The government knows this is bad for productivity and bad for society. So this week, possibly tired of waiting for change, it is shaking things up.
From Thursday, employers with more than 250 staff will be required by law to collect data so they can publish their gender pay gap, gender bonus gap and a breakdown of how many women and men get a bonus. They must also reveal the proportion of men and women in each of four pay segments, or quartiles, from lowest to highest pay.
There are no rules about what bosses should do once they uncover pay gaps but the government’s push to get the figures out into the cold light of day has to be welcome. The results must be published within 12 months on the employer’s website and a government site. If customers do not like what they see, they can go elsewhere. The same goes for potential recruits. Existing employees could use the findings to challenge their managers.
At its simplest, this is naming and shaming. No one will want to be top of the gender pay inequality rankings. But there is also an element of helping companies to help themselves. Unless they recognise the awkward truth that they have a pay gap, they won’t do anything to get rid of it.
It’s worth being slightly cynical and recognising that not everyone will be upfront about their pay differences.
Employment lawyer Josephine Van Lierop at Slater and Gordon notes employers are not required to provide any narrative with their pay data and so they may fail to shine any light on why they have a gap. She goes further:
We also suspect there will be a certain degree of licence for employers to exclude and manipulate data, which is highly subjective [and open to] interpretation in any event.We expect big-budget organisations to be hiring expert pay consultants to identify and manipulate the numbers, how the parameters of the quartiles are identified, which people are counted and to put a positive spin on the data”
But let’s hope the majority recognises the benefits of taking the new rules seriously and using them as a chance to boost both morale and productivity. To do that, employers will need to get to the bottom of what has caused any gaps.
That is harder than it sounds. The reasons for the gender pay gap are many and complex. Given there are laws against men earning more than women for doing exactly the same work, gaps are rarely down to outright discrimination.
One factor often flagged for women’s lower earnings is the time they take out to have children and the nature of work they return to – the so-called motherhood pay penalty.
The Office for National Statistics (ONS) notes the gender gap is relatively small up to age 39 for full-time employees. From 40 upwards, the gap is much wider. So it goes from just 1.5% for 30-39 year-olds to 13.4% for the 40-49 age bracket and 16.2% for the 50-59 bracket.
Employers must also ask themselves how they are treating people who choose to go part-time. From the age group 22-29 upwards, the pay gap for full-time and part-time employees together is wider than for full-time employees alone. The ONS says this shows that, in those age groups, more women are working part-time in jobs that tend to be lower paid.
But it is worth noting that for just part-time workers, the gender pay gap was minus 6% in 2016 – meaning female part-time employees earned 6.0% more than male part-time employees.
Gender pay gap by age group
Those who really want to close their pay gaps will look at their findings by age group and will consider whether parental and other caring duties are responsible. Then they will consider what sort of parental leave they are providing for men and women and what flexibility they could offer, whether that is working from home or job shares.
Employers should also look at how many women they are promoting into the top, high-earning positions and whether they are considering a wide range of candidates when jobs come up.
A more radical reaction to their findings would be simply to close the gap by giving women a pay rise. One firm that did that, London marketing start-up Brainlabs, was featured in this column last year. After it found an 8.6% pay gap, it raised female employees’ pay by an average of 8.6%. The idea – agreed by a company-wide vote – was that rather than waiting for good intentions to level up men and women’s pay over time, the employer levels the pay and then works backwards to ensure individuals’ pay represents value for money for the firm.
About a year on from introducing what it dubbed the “pay gap tax”, Brainlabs director Sophie Newton says the gap is now a “negligible” 1.8%. The company has been looking at how to entrench gender equality through its recruitment, management, pay, environment and giving people ways to speak up.
Newton, a mathematician, has built technology that tracks and shows the gender balance and pay gap for the company, each team and department. “I can see on a daily basis what the stats are and am aware of small shifts over the course of a year,” she says.
“More importantly, the measures introduced last year have contributed to a much more gender-balanced company at all levels,” she adds. Half of its 90 employees are now female and three of the eight senior managers are women.
It would be naive to think many others will take such radical action when the inconvenient truths about their pay gaps start appearing on company websites over the coming year. But the new rules will shed a fresh light on gender pay discrepancies and surely recognising the scale of the pay gap problem is better than carrying on as if it will close itself.
https://www.msn.com/en-gb/money/news/uks-gender-pay-rankings-will-put-discrimination-under-spotlight/ar-BBzbKOE?li=AA54rU
