Time’s up for large employers to submit their gender pay gap report. Our roundup explores what we can we learn from the submissions.
Remind Me What The Gender Pay Gap Is All About
All public and private sector organisations in Britain employing more than 250 people had to send their first gender pay gap report to the government by 31st March and 4th April respectively.
The report needed to identify pay differentials between men and women to show:
- Any differences in terms of hourly rates of pay – for example, men earn 10% more per hour than women
- The percentage of each sex at different pay quartile positions – this might show that the lowest paid quartile of the workforce is mainly female and the highest quartile mainly male
- Any bonus gap – such as men earning 20% more in bonuses than women
Both the mean and median figures need to be reported and organisations must provide a commentary explaining their results and what they intend to do to reduce any gap. Results are published on a government website and must also be publicly accessible on each company’s website.
What Not to Do
True to form, the Big Four exploited a loophole in the guidance and have been publicly named and shame for their action. Instead of including all employees in their figures, they omitted the data of their highest-paid individuals; their partners.
After facing criticism from the Treasury Select Committee, these leading consulting firms were forced to re-report their figures. In three cases the recalculation increased the median hourly gender pay gap.
|Consultancy Name||Original Gender Pay Gap||Revised Gender Pay Gap|
|Ernst and Young||14.8%||19.5%|
The only exception was Deloitte which saw a slight decrease from 15.3% to 15.2%.
The moral of this story? Abide by the letter and spirit of the government’s reporting guidance.
The UK’s gender pay gap currently stands at 19.1% for all employees or 9.4% for those working full-time. Beneath these headline figures, the submitted reports reveal a range of results:
- A small number of organisations have a reverse gender pay gap – for example, Cambridgeshire Police pay women 12.9% more than men.
- At the other end of the spectrum are Phase Eight whose female employees earn 64.8% less on average than males.
- Other organisations, like the UK Armed Forces, are almost gender neutral paying women 0.9% less than men.
The main reason cited for the gender pay gap is that organisations have more men in senior roles where significantly more money is earned.
Take Easyjet: they pay women on average 51.7% less than men. The reason for this is that just 6% of UK pilots are women earning a mean salary of £92,400. In comparison, 69% of cabin crew are female earning an average salary of £24,800.
With such a gender divide between high and lower paid roles, it’s no surprise that there’s a massive pay disparity.
What can Easyjet do about this? Seeking to employ more women in pilot roles and more men in cabin crew roles would help close the gender pay gap. However, this will require more creative recruitment tactics to be used to attract the right numbers of suitably qualified candidates of each sex to the roles. And all without breaking equality laws.
What Does The Gender Pay Gap Mean For Employers?
With pay gaps now out in the open, customers, employees and potential future candidates will have access to the data. This will allow both men and women to factor the information into decisions like whether they want to apply to or remain with a company or do business with an organisation.
With the glass ceiling still evident in many organisations, this could be a particular consideration for female applicants when seeking career advancement.
Nicky Morgan, Minister for Women and Equalities, said the information would help women “use their position as employees and consumers to demand more from businesses, ensuring their talents are given the recognition and reward they deserve.”
However, it’s useful to remember that the data works both ways. Organisations that pay males less may find fewer men applying for roles or possibly even asking for higher starting salaries.
What happens next is in the hands of organisations, candidates, employees and customers. The gender pay gap reporting exercise could be an exercise in futility or a catalyst for change. We await next year’s reports with anticipation.