Gender Pay Gap Reporting – Five years on.

The reasons for the Gender Pay Gap

There are many reasons for the Gender Pay Gap from outdated traditional gender stereotypes to lack of female representation in STEM subjects and the reluctance of women to challenge or request pay reviews.

However, the largest contributing factor is that many females do not reach their full potential in their career or take significantly longer to do so. As a result, more males than females occupy senior and leadership positions and are paid at a higher level. The reasons for this are many and varied, but the primary reason is because women take on the majority of the “caring load” whether that is because of children or elderly parents. They also suffer from the “motherhood penalty” – the detrimental impact that taking time out of the workforce has on a woman’s career.

This is borne out in the statistics. In the early stages of their careers, women are paid the same as their male peers and the gender pay gap is negligible. At 18–21 years of age it is just 0.9%. However, it rises significantly after the reproductive years - at the age of 40 it leaps to 10.9%.  

Of course,  it is not just women who can care for children but attempts by the UK Government to encourage equal sharing of childcare such as the statutory shared parental leave scheme have largely failed due to stigma, financial pressure and lack of awareness. Some businesses are leading the way with enhanced contractual shared parental pay and paternity leave schemes but there is a long way to go before this becomes universal and societal attitudes shift so that more men feel able to take parental leave.

Returning to work flexibly following maternity leave also presents a new challenge for managers and employees alike and requires careful management and awareness.  Remote workers will inevitably have fewer opportunities than their office -based colleagues to be “visible” to their managers which can lead to proximity bias where managers give preferential treatment to those physically present in the office. This may well be unintentional but this unconscious bias can impact upon career progression and pay.

There are also the more blatant acts of discrimination “We can’t give Jane our key accounts - she is never here!” or  “I would like to promote her -  but is she likely to have any more?” Unfortunately, all real life scenarios which I have encountered in my practice as an employment lawyer. Failing to pro-actively manage such situations is likely to result in businesses losing experienced employees and result in costly litigation and reputational risk.

 

How can we change this?

Progressive Leadership

Closing the Gender Pay Gap should be a top priority of all leaders. There are numerous business benefits in doing so:

• Attracting, retaining and supporting female talent to reach their full potential means improved employee engagement, productivity and profitability.
• Being able to give a positive message on diversity improves business reputation and brand and is increasingly important to your stakeholders and clients.
• Women make up 50% of the population and workforce. Promoting an inclusive culture and making your workplace a place where everyone can thrive is essential to success.

However, HR should not be leading this initiative - it has to come from the top. Senior Leaders should be publicly pledging commitment to this cause and taking positive action.

 

Allyship and understanding

Increasingly, Linked-in is flooded with posts from male leaders stating that they are leaving early to “do the school run” or “taking some time out to play with their young families”. This is to be celebrated – the only way the Gender Pay Gap will close is if there is no shame or stigma in men taking an equal role in childcare.

However, it is important that we recognise that these leaders are in a privileged position to manage their own workload. How would junior females who did the same be judged? Leaders should ensure they lead by example but also be aware of challenges faced by employees at all levels. Building a culture where taking parental leave is celebrated and family life is recognised to exist alongside work life is key.

 

Embracing Flexible working and checking your bias

The extortionate costs of childcare in the UK mean many women choose to work part-time following return from maternity leave. Part-time workers are not part skilled, part qualified or part committed. In fact, many part-time workers are working full time hours for part-time pay but require a little flexibility on work location or hours. It is important that assumptions are not made about ambitions or a desire to progress. Focus on transparent career development, support and mentoring and be aware of unnecessary barriers and challenges to progression, such as cultures of presenteeism.

 

Voluntary Reporting in advance of further legislation?

The Gender Pay Gap Reporting Regulations require large companies to analyse and publish their reports on both their own website and on a publicly available government portal. There is an option to provide a narrative explaining the results and the actions a business is taking to address any gap. However, the figures published are not verified or challenged and there are no penalties for having a Gender Pay Gap – only for failing to publish the information.

Contrast this with new legislation approved by the European Parliament last week which supported a much wider range of measures on pay transparency in a bid to tackle the Gender Pay Gap across the EU which will come into force next year. This gives employees the right to request pay information and forces companies with a Gender Pay Gap of over 5% to take corrective measures.

Whilst this legislation does not apply in the UK, it will be relevant for employers with operations across Europe and it also shows the direction of travel in this area with the employee threshold reduced to just 100 employees. There are already campaigns for the UK to follow suit, and it is highly likely that in the future, similar legislation will follow. Getting ahead of the curve now, means businesses will be well placed to report positive results if, and when, the UK introduces similar measures.

Finally, on current figures, an 18-year-old woman entering the workforce today will not see gender pay parity in her lifetime – this is simply unacceptable. We owe it to ourselves and our future generations – our daughters and our granddaughters - to drive for this change.

 

Need advice and assistance?

We work with businesses to develop Diversity and Inclusion strategies, analysing gender pay gap and ethnicity pay gap data, identifying areas for improvement and supporting with implementation. Please contact Claire Taylor-Evans on [email protected] for further information.