Firms face last-minute dash to report gender pay gaps

Last year, 10,559 organisations employing 250 or more people reported their median and mean pay and bonus gaps for men and women before the 4 April 2018 cut-off. Government calculations gave an overall pay median (mid-point) pay gap of 9.7%.For the reporting period 2018-19, among the 9,087 companies that have already reported, the median pay gap has risen to 10%.The figures reflect the overall pay gap in an organisation. This is different to the legally-enforceable equal pay requirement ensuring employers pay men and women the same for performing the same role or work of equal value.

What does the increase in the gender pay gap actually mean?

Early indications of the rise in the gender pay gap were reported in February. Four in ten private companies reporting before today’s deadline said their gender pay gaps had increased this year.   Speaking to Relocate Global about this year’s headline trend, Kaammini Chanrai, gender research and policy manager at research and campaign group, Business in the Community, said that the increase wasn’t automatically bad news for workplace equality.“What matters more is diagnosing why the gaps have increased. For example, in some circumstances, a rise in the gender pay gap does not necessarily mean that gender equality in that particular environment has got worse.“It actually could mean – if we are looking from the perspective of an organisation that struggles to get women through the door – that if that organisation is trying particularly to recruit more women in the lower tiers to then progress them upwards, that is naturally going to increase their gender pay gap.“I don’t see that as a bad thing because it shows that organisation is making a concerted effort to address the problem of not having enough women in their organisation. “So I think essentially, the [gender pay gap] figure itself does matter – it is important. But what matters more is the narrative and reason behind why the gender pay gap exists in that organisation. And ultimately, what the organisation is doing to tackle those problems."

Gender pay gap reporting 'no quick fix'

Also commenting on today’s figures, law firm Prettys agrees that compulsory gender pay gap reporting is no "quick fix" for organisations struggling with the issue. Eliminating the problem in the UK’s workplaces will only happen if employers start to recognise the structural and cultural issues behind the gender pay gaps.Women can often lag behind male colleagues in earning power because of a number of factors, said Matthew Cole, employment partner at Prettys.“Perhaps the main reason there is a pay gap is the fact that workplaces have still not made the necessary adjustments to allow women to pick up their careers effectively following a break for maternity leave, or to bring up children,” he said.“Whilst employers are making increasing efforts to put into place family-friendly working policies, many of these will take years to bear fruit, and the attitude among many employers has not yet shifted far enough.“Clearly the pattern of flexible working to support childcare and similar responsibilities is evidence that women undertake the large majority of caring responsibilities outside the workplace, and this seems to inhibit career progression for women.“In our experience Shared Parental Leave is hardly ever taken up by men. There are many reasons why this could be, including society’s expectations or that men do not actually want the time off, choosing instead to disrupt just one career instead of two.” But he added: “There are also other, cultural issues, which are only just gaining more mainstream attention. There is evidence that men may over-value their worth, whilst women under-value their contribution. This means that men may push harder for career and pay progression, when compared to an equally (or more) competent woman.”And he concluded: “I think the pay gap will only be narrowed over a very long period of time by changing employment practices and attitudes.” 

The business case for narrowing gender pay gaps

Vanessa Bell, partner and Prettys’ head of employment, also warned that while there may be no legal implications as long as the pay gap is reported properly, a significant difference between earnings could impact future recruitment. “I think decision-makers have to look at the gender pay gap from a business perspective, not just out of a sense of legal or moral duty,” she said.“It’s all well and good a business revealing its pay gap, but if these businesses don’t take action to address it, they could lose out on recruiting or retaining good staff.“Talented women may disregard the company and choose not to apply for vacancies based on a perception – that may be misguided – that women are not valued in the business.”

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