Last year, a new government initiative to enable gender pay gap reporting was introduced as a way of helping combat gender inequality within UK workplaces. The gender pay gap reporting process is mandatory for companies with over 250 employees. Public sector organisations must file reports by 31st of March and by the 4th of April for companies and charities.
The first year of reports shed fresh light on the discrepancy of earnings between men and women in the workplace, underlining a lack of female representation in executive positions. Whilst the figures were met with criticism and condemnation, the purpose of the exercise was to identify the problem and encourage business leaders to take action to make improvements. So how is the UK’s gender pay gap looking one year on? Well, unfortunately not much has changed.
The gender pay gap between 2017 and 2018 did shrink, but only a mere 0.1 per cent - from 9.7% to 9.6%, a disappointing figure. Out of these, this year it has been reported that a quarter of companies and public sector bodies have a gender pay gap of more than 20% in favour of men. As well as this, almost eight in 10 companies still pay their male employees more than women.
After having a year to make improvements, it is disappointing to see such large discrepancies in salaries across UK companies. However, it is important that these findings are viewed as work in progress, of which there is an increasing level of urgency.
Many organisations, particularly those with the worst statistics such as sport organisations, finance corporations, law companies and airlines, promised to make significant changes after their first reports were published. Since then, the statistics show that these efforts have fallen short.
Worryingly, the Royal Statistical Society have stated that they believe that as much as 15 per cent of the 2018 gender pay reports published are incorrect, with up to 1,600 organisations potentially calculating the median or pay quartiles. It has found that 572 employers have definitely made mistakes and they are suspicious about a further 1,000, meaning the overall results could be worse than first thought.
It is incredibly easy for a company leader or entire industry to assume that there is no specific gender pay gap within their organisation, but it wasn’t until the reporting process came in under the Equalities Act that has made them see the issue is bigger than first thought. Gender pay gaps are often created and then enlarged by subconscious decisions, like offering better opportunities or promotions to male employees which in-turn creates a wider gap between male and female employees. From the results of this year, it appears that these subconscious decisions are continuing, despite many being aware of the problems they are causing and the backlash they will receive when their gender pay gaps do not get any smaller. It is worth noting that company leaders have not deliberately rigged the pay system against women, but it is arguable that many organisations have failed to tackle the problem of discrepancies in salaries.
One crucial step to fixing the problem is onboarding key executives so that the changes required will be reflected across the whole organisation. Once this is achieved, measures and programmes can start to be put in place such as career-long mentors which can assist the well-being of employees throughout their careers and help women, particularly after taking a career break. The truth is many women choose to take time out of their career for childcare or looking after family members which often results in an inadvertent bias in pay scales. Organisations must understand that returning from a break shouldn’t mean a slower career progression or lesser career prospects. Tackling this kind of issue is no easy task and it must be looked at as a marathon and not a sprint – knee-jerk reactions will have very little long-term or no effect.
Obtaining a 0% gender pay gap is an extremely difficult thing to do and at FDM Group, it took a lot of hard work and dedication to achieve it. It is important to note that it is not just about hiring more women into senior positions, it is also vital to retain and reward existing talent. Organisations need to understand that this is not just about flipping this on its head and creating an executive board of all women, the gender pay gap must be equal, or as close to 0% as possible so that businesses keep up with modern-day values and society.