The Gender Pay Gap: Not Noticeably Closing Yet
The latest disclosures under the gender pay gap legal requirements for companies shows little improvement, with a quarter of companies and public sector bodies having a pay gap of more than 20% in favour of men. We look at businesses’ legal obligations and what the latest reported figures tell us.
The figures filed in April 2019 for the year 2018 show negligible improvements in the gender pay gap, which has apparently closed by a mere 0.1% to 9.6%.
Gender pay gap obligations
Companies and public sector bodies in the UK employing more than 250 people must disclose their gender pay gaps each year on their own website and on a dedicated government website. They must disclose:
• Gender pay and gender bonus gap (mean and median averages)
• Proportion of men and women receiving bonuses
• Proportion of men and women in each quartile of the organisation’s pay structure
Non-compliant organisations could face unlimited fines.
What do the latest results show?
By this year’s deadline (Friday 4 April), the reported gender pay data shows little improvement on the previous year, with an average median gender pay gap of 12%. Women are still being paid less than men on average across all industries with nearly 80% of organisations still paying men more than women. Just 14% of companies paid women more on average, and only 8% reported no difference in median pay between men and women.
The overall median gender pay gap is now 10.4% (11.8% in 2018), with the construction sector and the financial and insurance activities sector revealed to have the largest of pay gaps. The gender pay gap is 15.4% in architectural firms - almost double the UK average of 8.6%.
What does this mean?
Though the figures clearly show little improvement, and a long way to go for the gender pay gap to close, there are two potentially significant problems that mean the true picture is most likely distorted. Firstly, it is not known how many organisations have not reported their data and, at the time of writing, 1,110 organisations had reported late.
Secondly, there has been criticism that the data submitted by some companies is inaccurate. According to paygaps.com, 34% of organisations have either made a “critical error in their calculations or they have submitted their 2017 report to the 2018 folder - making the overall data highly inaccurate". Such errors would mean the data as a whole does not accurate portray the current gender pay gap.
How can we close the gap?
Closing the gender pay gap should be a priority for many companies and public sector bodies who have not yet tackled the issue effectively. Government has published important guidance for businesses which poses eight key questions to help employers identify different potential causes of the gender pay gap, and they can address them.
The key areas to focus on include examining the gender balance in your organisation using your own seniority structure; identifying gender imbalances in promotions; re-examining recruitment routes; and supporting both men and women in their caring responsibilities.
Once the issues are identified, there is also government guidance to help employers develop a robust, evidence-based Action Plan on the gender pay gap Viewing Service.
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