30 Oct 2018
The gender pay gap has always been a hot topic of discussion for both employees and employers. In 2017, there were issues surrounding the BBC and the difference in pay between male and female presenters. This brought with it an opportunity to have the discussion again in the UK.
We have heard stories about the pay gap and the effects it is having on the lives and morale of employees from different backgrounds, industries, and locations.
In an effort to increase awareness and pay equality in the UK, the government introduced a legal requirement for businesses with over 250 employees, it required them to publish their gender pay gap data on an official.GOV site by the 4th of April 2018.
As of October 2018, the gender pay gap data for over 10,500 employers and businesses are publicly available online.
What is the gender pay gap?
We must first define what exactly the gender pay gap is. It's the measure of the difference between men’s and women’s average earnings across a business.
The Office for National Statistics (ONS) defines the gender pay gap as the difference in the median pay between men and women. According to the ONS, in April 2017 men earned 18.4% more than women during the same period, although this figure has fallen from 27.5% in 1997.
You can find more information and reliable statistics on the ONS website.
Gender gap VS equal pay?
People will associate the gender pay gap concerns with equal pay issues as they both address the differences between the pay men and women receive in the workplace.
Although both issues address similar concerns they are two completely different things. Equal pay addresses the issue of equal pay for equal work.
The Equal Pay Act brought with it the Equality Act 2010 making it illegal for businesses to pay men and women differently for performing the same tasks and duties.
Why is there a gender pay gap?
There are many reasons why it exists and why we are now trying so hard to narrow that gap. Some of the more popular reasons are;
More men in senior roles - One of the more popular factors that negatively affects the gender pay gap is the fact that most of the highest paid sectors are male-dominated.
There is no contesting the fact that there are more men than women in senior roles in the workplace. This means that the men these positions are getting a lot more money than their female counterparts, which in turn has a negative effect on the ongoing problem.
Women and maternity leave – The notion of shared paternity leave was only introduced to the UK in 2015 and until then it was up to the women to bear the burden of maternity leave.
When the maternity leave is over, the new mother then has to either go back to full-time work in the same position and on the same pay or drop down to part-time jobs below their skill set and with limited possibilities for progression.
Both options leave the woman with more expenses while a man in the same position would have gained more experience, potentially been awarded a pay rise or even progressed within the company during that period.
The Equality and Human Rights Commission found that up to 54,000 mothers in the UK could leave their job early as a result of getting fired, made redundant or treated so poorly that they choose to leave after they became pregnant.
The gender pay gap myth
There have been a variety of justifications and myths about the issue. We have come across different theories explaining why there might be gender pay gaps.
In reality, there are a number of complex and overlapping factors that affect the issue. Some of the myths surrounding and contributing to the gender pay gap include:
- "It’s because of the type of job they take" – When the gender pay gap data was first published, a number of companies blamed the pay gap on the type of roles that women were applying for. However, The Telegraph compared salaries from the year ending April 2012 and they discovered that the average man in an executive position earns up to £40,325 annually compared to women in the same position earning up to £35,265 annually.
In its annual survey of hours and earnings gender pay gap 2017, the ONS found that for full-time employees it exists across all major types of jobs.
- "Women don’t ask for raises" – A popular defence is that women don’t ask for raises. Studies show that when women ask and negotiate about a rise it can negatively affect their chance of getting the raise or in some cases the job.
- "There is no such thing as gender pay gap" – There are still some employers that believe it does not really exist. The exact size of the gender pay gap in the UK can vary depending on the metrics used to calculate it. But, it is clear that there is one.
- Women get less compensation because they are less educated or less experienced – The general justification for paying women less at work is that they are less educated or have less experience.
This couldn’t be further from the truth, it is common knowledge that girls do better in school than boys. The problem is many women then go into employment in sectors that offer less in terms of financial rewards, such as the care and hospitality sectors.
Gender pay gap calculation
There is no straightforward method for calculating the gender pay gap between men and women. It is normally calculated by subtracting the median hourly earnings for women from the median hourly earnings for men.
The ONS introduced the most reliable calculation method. It calculates the point at which half of a company’s employees earn more and the other half earn less.
Most companies use the hourly earnings to calculate this figure in order to avoid distorted results by the differences in hours worked by men and women.
For more information regarding gender pay reporting, download our free whitepaper here. We also compiled an expert set of gender pay gap facts explaining the essential information that employers need to meet the new regulations put in place.
If you require expert support, contact Croner. We will request and analyse your pay data to be able to provide you with a statistical outcome that determines if you have a gender pay gap or not.
We will also advise you on how to close the pay gap or how to keep the pay gap closed. To speak with one of our pay & benefits experts call 0808 145 3379.
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