Time is Almost up for Companies to Publish their Gender Pay Gap

According to studies, more than 3 out of 4 employers in the UK pay their male staff more than the female staff. Additionally, male workers earn 10 percent more on average than their female counterparts in 9 out of 17 sectors of the economy.

This is the situation as it stands with just days before the deadline expires for all employers in the UK (with at least 250 staff) to report their gender pay gap.

So far, the numbers published provide huge insights for both companies and the government. The data collected, not only reveals the worst and best-performing employers in the UK for both public and private sectors but also explains the basis of the gender pay gap.

In addition, the year-long mandatory exercise has also uncovered serious anomalies in the process designed by the government. Questioning the ability of the Equality and Human Rights Commission (the regulator), to enforce compliance with employment law.

Companies Publish Their Gender Pay Gap Data

Major difference between pay of male and female employees

The cumulative percentage of male and female workers was recorded by the median pay gap of their companies, revealing that female staff are more likely to work for an organisation, where the male staff is paid more, overall.

The main explanation for the difference is the presence of more senior men than women. The highest gender pay gap so far is an astonishing 88 percent that was reported by the textiles group Rectella.

Similarly, the national average of this gender pay gap stands at 18.4% for full-time and part-time workers, according to the Office for National Statistics in the UK.

However, it is possible that these figures are underestimating the pay gap, due to the choices made by the government at the start, about what factors to exclude from the calculations.

One such exclusion is for professional services employers like management consultants and lawyers. These employers do not have to include equity partners while calculating the gap because they are not technically classified as employees.

There are, however, some employees like EY and Deloitte, who have voluntarily disclosed more comprehensive pay figures including partners (partners are usually highly paid and are disproportionately male.)

Similarly, the analysis of the government data done by Financial Times, combining with the employee numbers provided by Duedil (a business information provider, which covers two-thirds of employers), reveals that almost 89% of females work for an employer who pays the males more.

Not only this but up to half of the women work for an organisation that pays men at least 9 percent more. There was only 11% of women who were working for an employer that pays them equally or better. In comparison, 93% of males work for an employer that pays them equally or better than females.

Worst and best performing sectors

Ever since the pay gap figures have been made public, revealing gender discrimination, many financial services companies have come under tremendous public scrutiny.

While Goldman Sachs International did report a median gap of 36.4%, banks including Barclays, RBS, Lloyds, and HSBC all have reported pay gaps ranging between 14.2% and 43.5%.

Not only this, the data reveals that although none of the sectors pay females more than males on average, it is the women working in accommodation and food services that earn a mere 1% less than their male peers. Those working in health and social care sector earn 1.3% less. The reason for this small gender pay gap might be the fact that many companies in these sectors have flat pay rates.

Why is there a gender pay gap?

There are some public policy experts and employers who are questioning the significance of the data, and the entire point of this reporting exercise.

One of the reasons why this difference of opinion is there is that that the reported hourly average pay gap on the government’s website does not compare the earnings of a male and a female worker performing the same job.

In recent years, this pay gap has significantly reduced, particularly for female workers aged between 22 and 29. In fact, female workers in this age group, out-earn their male peers, and it is only in later decades that the traditional gap widens.

The recent analysis by the independent bodies suggests that almost two-thirds of the gender pay gap can be correctly explained by the observed differences between male and female workers in terms of age, the type of job, and the employers for which they work.

Overall, it is observed that the national gender pay gap in the UK is higher than both the EU and OECD average. Now the question that remains is that what will the government do with the findings of the first year of gender pay gap reporting.

Shortcomings relating to the gender pay gap reporting

One of the major shortcomings of the reported gender gap data is that the process clearly reveals that a significant number of employers have provided inaccurate information.

This, in turn, raises a number of questions about the way the entire process was designed and whether the regulator who was entrusted with the enforcement of the reporting legislation is up to the job.

One of the companies, Rainham Industrial Services, has reported a mean gender pay gap of 106.4% that implies that for every £100 earned by a male worker, a woman would be “fined” £6.40, which is quite disappointing, to say the least.

Similarly, two companies have reported that there are no women working with them, despite the fact that the person reporting one of the companies’ data was a woman.

The FT analysis suggests that because the Government Equalities Office, responsible for the portal, did not have a fixed format for data submission that allowed it to be checked and a list of all the employers it expects to report, there could be more serious errors or omissions in the reported data.

Wrapping up

Reporting the gender pay gap is an excellent initiative by the government to address issues like gender discrimination, sexual discrimination, and other workplace inadequacies.

There are, however, a number of loopholes and shortcomings in the entire process, which allows leeway to the employers. This is evident in the gender pay gap data analysis, which shows serious discrepancies and flaws on the part of companies, trying to escape clean of the entire exercise.

Overall, it is important that both male and female workers get equal pay for doing the same job, as envisioned under the employment law.