What is the Gender Pay Gap and why is it important?
The Gender Pay Gap is the difference in the average pay of men and women across the labour market. According to the Office for National Statistics, in 2019 women were paid on average 17.9% less than men.
The reasons for this are varied but relevant factors include:-
Women taking time out of their careers to have children;
Women predominately taking on caring responsibilities for elderly relatives;
Women taking part-time roles with less opportunity for promotion or lower paid roles to fit around childcare commitments;
The lack of representation of females in STEM subjects and careers, and
Roles in traditionally female dominated industries such as retail, hospitality and care paid at lower salaries.
Inevitably, all of the above has a direct impact on women’s pay.
What is measured can be monitored
In 2017, the Gender Pay Gap Reporting Regulations were introduced with the aim of requiring employers to measure and report on their gender pay gap every year. All employers with over 250 employees in the UK became obliged to analyse their payroll data and publish their gender pay gap on a publicly available government website by 5 April each year.
The legislation not only forced larger employers to measure and monitor their gender pay gaps but it also lead to many smaller organisations undertaking the exercise on a voluntary basis. There are of course many positives to be gained from improving your gender pay gap including boosting diversity and productivity and, retaining and attracting female talent. Over the past few years, many employers have seen their gender pay gap reduce through flexible working initiatives, unconscious bias training and increased management awareness of diversity issues.
The impact of COVID-19
Unfortunately, the coronavirus pandemic is likely to undo much of this positive progress. With schools closed, and limited childcare options, working parents face impossible choices between prioritising their livelihoods or their children’s wellbeing. Whilst furlough can be requested by both parents, the Institute of Fiscal studies recently reported that 14% more mothers than fathers had been furloughed. Employers are also not required to grant furlough requests and 71% of women who asked to be furloughed to care for children had their request refused. During the first lockdown last March, employers were more willing to furlough employees but now, with more parts of the economy open, employers are less able to accommodate such requests. Whilst this impacts both men and women, due to stigma and societal pressure, it is more likely to be the mother who takes primary responsibility for childcare in this situation. The TUC recently reported that 1 in 6 working mothers have had no choice but to reduce their working hours and some mothers are leaving the workforce altogether. In addition, female dominated sectors such as hospitality, catering, retail and tourism have been badly affected by the pandemic. A recent survey by PWC found that 78% of people who had lost their job due to COVID-19 were women.
The full impact of the pandemic on the gender pay gap will not be evident until 2022, as the Government suspended the Gender Pay Gap Reporting requirements in 2020, but it is inevitable that all of these factors will have a negative effect.
There has been no indication that the Government will postpone the reporting requirements this year so organisations who are required to report should ensure that they comply with their obligations by 5 April 2021.
Opportunities for employers
But it is not all bad news, COVID-19 provides an opportunity for forward thinking and innovative employers to embrace new remote working practices and break down old fashioned cultures of presenteeism and full-time attendance in the office. Now that many organisations have seen that employees can work productively from home, it is hoped that this will result in higher retention rates of female talent and increased promotion opportunities for women. It is well documented that companies in the top quartile for gender diversity are 25% more likely to have above average profitability than those in the lower quartiles.
It is also clear that employers who address the gender pay gap and embrace diversity attract talented female candidates to their roles. Candidates are becoming increasingly interested in the culture of organisations and review employers’ diversity statistics, flexible working policies and gender pay gap when deciding where they wish to work. A recent survey reported that one in four employees propose to leave their current employer after the pandemic due to the treatment they received during this period. Smart employers will be seizing this opportunity to secure and retain talent by promoting a diverse and flexible culture. These will be the organisations that thrive in the future,
Boyes Turner offers an in-house gender pay gap reporting service to help your organisations analyse and understand their gender pay gap. We also offer Unconscious Bias and diversity training courses for managers.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.