This week saw the deadline for all UK companies with over 250 employees, and certain public sector authorities, to publish their gender pay gap reports.
Unsurprisingly, the statistics have revealed that a substantive majority (78%) of reporting organisations pay their male staff more than female staff when averaged across the board. In contrast, only 8% revealed no gender pay gap at all, and 14% reported a pay gap in favour of women. However, what does this mean for organisations going forward? Are we likely to see greater equality in pay going forward?
As a recap, the gender pay reporting requirements oblige larger organisations (over 250 employees) to publish their mean and median hourly rate of pay, bonuses and four pay quartiles, in respect of each gender. This data is intended to provide a more holistic view of how UK businesses pay their male and female staff and presents an exciting opportunity for evaluation and change for organisations who have reported a disparity.
It's important to note, gender pay reporting is different to "equal pay" legislation" which focuses of the difference of pay between male and female employees undertaking the same or broadly similar roles, or jobs rated the equivalent. Gender pay disparities are lawful, whilst unequal pay is not.
Having assessed the 10,169 companies who have filed their reports as at April 6th, the statistics have provided an insightful overview of the opportunities available to women to earn those higher salaries if given the opportunity. Notwithstanding the reaction from some organisations that have come to the sharp realisation that their gender pay gap was larger than perhaps they thought, and action is needed to create greater equality across the board.
Looking at the most stark examples, companies such as Apple, Boux Avenue and Ryanair have particularly felt the media heat for their sizable gaps of over 70%. This is considerably higher than the 9.7% average median pay gap amongst all reporting companies.
Whilst such companies have sought to justify the extent of their gender pay gap, for example, Ryanair blaming the general lack of female pilots in the aviation industry and Boux Avenue relying on their high percentage of female retail/store workers compared to other roles, it is questionable if such a considerable pay gap can be justified and what they are going to do about it? Already, when asked about their action plan, Ryanair reiterated their enthusiasm to encourage women into higher-ranking positions.
However, whilst the limelight may be on these few companies, disappointingly when comparing median hourly pay there is no sector which favours women.
So what’s next?
All organisations are going to be under increasing pressure and scrutiny to put measures in place to reduce their gender pay gap. Particularly for those organisations that have reported a higher than average disparity. Such measures are likely to include wider recruitment strategies, tackling unconscious bias in their industry or organisation, or removing those obstacles that have traditionally frustrated female employees from rising to the top. However, what is clear is that companies that don't seek to take action could not only lose out on attracting the female talent pool but could also come under increasing public scrutiny and reputational damage.
If you would like support in assessing your company's gender pay gap and tackling any disparities, please contact our employment team, Claire Knowles and Rebecca Mahon for more information.
Given the benefits of a diverse organisation, with fair opportunities for all, it's in every businesses' interest (including those with less than 250 employees) to be vigilant in how they pay and reward their staff.
And, for those who haven't complied with their reporting obligations….
The Equalities and Human Rights Commission are now in a position to issue notices to these companies and have stated that reporting is not only the right thing to do, it's the law. As such, those who have missed the deadline are exposed to legal action and potential penalties, notwithstanding public shaming.
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