Businesses with 250 or more employees have recently had to publish their second set of data detailing their gender pay and bonus gaps. We take a look at some of the trends; and comment on the issues facing employers who are within scope of the regulations.
How are firms doing one year on?
Overall, there has been a slight reduction in the average pay gap from 9.7% to 9.6% in favour of men. According to the government's statistics, less than 50% of firms have narrowed their gap since gender pay gap reporting became mandatory. 45% of those who published their data have seen an increase in their gap and 7% have seen no change. Of the 10,428 firms who have reported their stats, 78% have a gender pay gap in favour of men. 14% have a gap in favour of women and 8% have no gap at all.
At this stage, it is unclear how many firms have failed to publish their data. The Equality and Human Rights Commission has the power to take enforcement action against any organisation who fails to publish their data on time. Repeated failure to do so could result in an unlimited fine.
What initiatives can firms take to reduce the gap?
There are a range of initiatives which have the potential to help firms close their gender pay gap. Where the gap is skewed towards men, initiatives could focus on developing female talent and ensuring retention of women in top posts. Firms could consider whether their recruitment or promotion processes contain any element of unconscious basis and weed this out. Organisations that promote flexible working may be more likely to attract and retain female talent. Encouraging staff to take shared parental leave, and offering enhanced shared parental pay, may also help to close the gap.
However there are still underlying issues, particularly in STEM careers, which mean that there are too few women considering careers in certain sectors which continue to see highly paid roles occupied by men. This can place a limit on the effectiveness of employers' efforts to close the pay gap.
Are the gender pay gap reporting regulations effective?
Many non-profit organisations have observed that, without tough penalties and sanctions, the regulations are unlikely to lead to any real change. The Fawcett Society has suggested that the government require employers to publish a five year strategy detailing how they plan to close their pay gap. The TUC has commented that employers are not doing enough to address the gap and that the government should apply more pressure.
Does a pay gap mean women are not paid the same as men?
A gender pay gap does not necessarily mean that there is an equal pay issue. The gender pay gap figure does not compare like for like roles undertaken by men and women. It simply shows the gap in the average earnings of men and women in a business. A gap can commonly arise where senior, highly paid roles are held by men and more junior or less well paid roles are dominated by women.
Employers with access to our online HR Portal, BResourceFull Workbox, can view detailed information on gender pay gap reporting. Our earlier blogs on the topic are also available here and here. If you need any further guidance on the matter, please get in touch with one of our employment lawyers.