The Gender Pay Gap Widens – Stumble at the First Hurdle?

Clare Parkinson

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26 Feb 2019

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Last week the BBC reported that four in 10 private companies have wider pay gaps than they did last year. Is this just a stumble at the first hurdle, or is it indicative of the future?

The story so far…

The first round of gender pay gap reporting came in April 2018. It required all UK companies with more than 250 employees to report details of the mean and median hourly rate paid to male and female staff.

That meant 10,109 companies overall had to report their pay gaps.

7,853 of those companies reported a lower median salary for women.

The sectors most guilty of a pay gap in favour of men were construction, finance and education.

No sector was found to have a pay gap in favour of women.

One of the biggest contributing factors to the gap was the fact that women were not making it to the boardroom.

The example most often cited was that of HSBC, which had a 60% female workforce, yet had a 59% average pay gap. The reason given for this was that the top earners were male, thus bringing the male average up.

Fast-forward nine months, HSBC released their gender pay gap report for 2019, and in doing so alerted the nation to the beginning of a worrying trend.

HSBC’s pay gap had risen from 59% to 61%, making it the worst performer for gender pay disparity so far.

As the reporting deadline creeps ever closer, and more firms began to release their data, the trend became clearer. When the BBC published their report it served to confirm what many already knew.

The pay gap is widening.

What the data says

The report named Kwik Fit, Npower and Virgin Atlantic among the biggest offenders.

Kwik Fit’s gap took a dramatic turn from -15.2% to 14%, citing the departure of a number of senior female employees as the main reason for the shift.

Npower’s gap has grown from 13% to 18%, citing a number of female employees opting for a salary sacrifice scheme.

And Virgin Atlantic’s gap widened from 28.4% to 31%.

Construction remains the sector with the largest pay gap, and as of last week 74% of companies had reported a pay gap which favours men. Banks are still performing badly across the board.

However, before jumping to any quick conclusions, it’s important to remember that at this stage only 10% of all firms required to report have actually released their data.

And in the grand scheme of things, it’s not all doom and gloom. The hourly media gender pay gap is reported as 8.4%, which is actually down from 9.7% last year.

Which is why it is too early to judge how big of a stumble this is—if it is one at all—and what this means in the long-term.

It's a marathon, not a sprint

In response to the BBC report, Sam Smethers, Chief Executive of the Fawcett Society said:

“Women will be wondering what is going on, but the reality is this is a marathon, not a sprint. It will take a five-year strategy with a focused action plan to produce results combined with a tougher reporting regime.

“We also need to address all the causes of the pay gap, provide real transparency with pay data so that women can challenge pay discrimination; more generous leave for dads so that they can afford to take and to make every job a flexible working job, unless there is a business reason not to.”

Ultimately, the gender pay gap reports are not a means of eliminating the gender pay gap, but a commitment to transparency. The purpose is to make employers take notice, and hopefully—take action.

What can I do?

Contrary to popular belief, the biggest changes you can make cost little to no money at all.

Changing your recruitment systems, structures and performance assessments can have a massive impact. Little changes, such as ensuring you have multiple women in your candidate list when hiring for a new role, to keeping your interviews structured so there is little room for unfair bias.

Further transparency is also key. A well communicated, visible pay structure will encourage women to negotiate their salary, as they know what they can reasonably expect.

One of the biggest contributors (aside from women not making it to the C-Suite), is maternity leave. The gap increases significantly when women take time out to have children.

While shared parental pay is available to all employees who meet the eligibility criteria, it is not widely used. Encouraging the use of shared parental leave and pay in your workplace will help even out the gap between men and women when having a baby or adopting a child.

There are methods that require you to spend a little bit of money too- conducting an audit of your recruitment and pay systems. Recruiting a diversity manager or bolstering your current HR department to create a diversity taskforce.

Or, you could speak to Croner.

Give us a call…

If you want us to put together a gender pay gap report for your business, or have already published your report and want advice on the next steps, we have a Reward expert on hand to provide assistance.

Or, if you want help with recruitment, diversity, or general HR, speak to a Croner consultant on 01455 858 132.

About the Author

Clare Parkinson has over 20 years’ experience in the Croner Reward business. As Business Manager, Clare leads a team of Reward Consultants who specialise in the delivery of pay and grading related advice, including tailored pay benchmarking and gender pay reports.

Over the years, Clare has contributed to various industry publications on topics such as gender pay, executive remuneration and market pay trends.

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