UK businesses with more than 250 employees had to report their gender pay gap by 4 April this year. The resulting figures show that 7,755 firms paid male employees more money than their female staff,* based on median hourly pay between 2017 and 2018, and the overall gap remained virtually the same (9.6% compared to 9.7% last year).
Does this simply mean businesses aren’t doing enough? Or are there more complex explanations behind the numbers? Five industry leaders offer their insight. April 2019
Teresa Boughey, founder and CEO of Jungle HR
Businesses need to consider the inclusivity of their recruitment processes, talent management and reward strategy to become truly inclusive, says Boughey. ‘Companies still only do a couple of initiatives and think they’ve done enough. A holistic approach needs to be prioritised that encompasses all areas of the business. This is the responsibility of everyone in the workplace and not just a diversity and inclusion professional appointed to bring about change single-handedly.’
Maxine Benson MBE, co-founder of Everywoman
‘If the UK achieved gender parity, it could add £150bn to the economy. Asking businesses to report has been a good first step, as the pay gap is now a boardroom conversation. Companies are more focused on bringing women into the most senior positions, as currently, they make up two-thirds of entry-level management.**
‘The important thing is that we keep asking people to report – the good, the bad and their intention. What worked and what didn’t? Companies can then use this information to compare themselves with their competitors and draw up their own action plans, based on data and evidence.
‘Reporting annually will keep us honest, but this is an issue that is not easily solved. It’s about the long game.’
Helene Reardon-Bond OBE, International gender pay gap expert
‘Almost 8 out of every 10 UK companies in scope pay men on average more than women according to the latest figures, with only 1,422 employers paying women more,’ says Reardon-Bond. ‘The quartile data is interesting. It shows that women only represent 38% of the top pay quartile (up 1% on the previous year) and this is a key reason as to why the gender pay gap hasn’t closed.
‘All employers in scope have the choice to publish a voluntary supporting narrative and an action plan. Only around a third did so last year. Many of these were fairly formulaic and pretty bland. I would expect these to have improved and be more sophisticated this time around – much more effort setting out what they are doing to close their gender pay gap would attract women to their job ads, as we know that women are looking at the gender pay gap government viewing service before applying for roles.
But, Reardon-Bond adds, it is still early days. ‘It will take a few years for the trends to appear and for meaningful action and good practice to kick in. I expect the government will be looking closely at this and considering when and how to strengthen the legislation. Key to this would be to compel employers who are making no or little progress in closing their gender pay gap to publish action plans with targets. I think the government will also need to take stronger action against those companies that report improbable figures too.’
Lauren Touré, senior consultant for diversity consultancy Frost Included
‘We know that many working cultures lack the necessary transparency and consistency within their pay and performance structures to fairly assess employees,’ says Touré. ‘Bias is still hugely prevalent amongst key decision-makers, responsible for awarding pay. Men still make up the vast proportion of these roles in the UK. Subsequently, women are too often excluded from the decision-making process and the higher level of pay that comes with it.
‘These outlined contributing factors to the gender salary pay gap are only further enhanced around bonus allocation. Significant bonus is often awarded to the most senior executives. Decisions are made by fewer people, often with no shared or transparent framework.’
Diana van Maasdijk, co-founder and executive director at Equileap, providing data and insights on gender equality in the corporate sector
‘Gender pay is just one element of a much bigger picture of gender equality at work,’ says van Maasdijk. ‘Whilst it’s an important and tangible benchmark that proves organisations are sitting up and taking action, there are 18 other criteria that we examine in order to see which companies are really cutting it when it comes to equality – factors such as maternity benefits, shared parental leave, safety at work, recruitment strategies, right through to gender balance on boards.’
Of all the 10,589 companies that reported their gender pay information to the government in 2018/19, 13% have a gap of 3% or less. This, says van Maasdijk, ‘Is great and music to our ears. But the true test of really making the workplace gender equal is across all the other factors which play into this complex and deep-rooted issue.’
*Of the 9,961 companies that had filed their report by 5pm on 4 April 2019.