Given the recent news worthy articles around gender pay in the media, I felt compelled to take a broader look around this topic and in particular why organisations might want to be proactive in reporting the data around gender pay differences in organisations.
By April 2018 it will be a requirement for all companies with more than 250 employees to publish their gender pay figures under a new legal requirement which is ultimately designed to stamp out workplace discrimination. As these results will now be available for public viewing, it will allow organisations to minimize this in the longer term and transparency will shine a light on the factors contributing to the global gender pay gap and help identify what can be done to close it. The deadline for publishing gender pay information is 30 March 2018 for public sector organisations and 4 April 2018 for those in the private and voluntary sectors.
The gender pay issue is a topic that the UK government has been trying to tackle for a good number of years and now have some concrete deadlines in place that companies should conform to. The Office for National Statistics (ONS) estimates the current overall pay gap to be 18.1 per cent. Interestingly the data provided by the ONS show the gender pay discrepancy is relatively small up to the age of 39 for full-time employees. However from 40 upwards the gap is much wider. Data shows 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.
Looking at factors behind this data to really understand why this gap exists is important for companies to address it. There are a number of factors that contribute to or are often believed to affect the gender pay differential such as what sector or job discipline, level in the company, education level, flexible working and years of experience amongst other factors.
Interestingly, some of the sectors and jobs in which the pay gap is the highest are the ones in which bonuses traditionally represent an important component of total compensation. Financial services has the highest pay gap of all sectors at 37.4% and financial services represent the employers with the highest bonuses and therefore the highest gender pay gap.
We also need to remember that gender pay gap reporting is not about unequal pay. Women in the UK have had the legal right to equal pay since the 1970s, but the average earnings are still 18.1% less than men’s. Clearly there is still work to be done around this as the legislation set in 1970 hasn’t addressed the issues it intended. The UK is now in 20th place in the gender equality global rankings compiled by the World Economic Forum, when in 2006 we were in ninth. Ultimately there is more work to be done and organisations having to report on this and present information on it should go some way to ensure this is discussed at all levels.
At Morgan McKinley, we are strongly committed to playing our part in improving gender balance in businesses in the UK. We have partnered with XPERT HR, the UK's leading online HR resource to educate our clients on why careful communication around the results will be a core part when releasing figure and are hosting a Breakfast Seminar on GPG on the 14th of September 2017. If you are interested in attending this event please do email me for more information or to register for a place as soon as possible.