What can we learn from gender pay gap reporting?
Mark.Freed / 27 Jul 2017
The news at the end of 2016 was a little depressing: the UK gender pay gap will not close until 2069 - only 52 years to wait!
Obviously sitting back and waiting over half a century is unacceptable. The report says the gap will close much faster if action is taken now - so what steps have been, or can be made now?
This past April government legislation on gender pay gap reporting came into force, meaning businesses have a year to meet the deadline to publish their gender pay gap figures. The legislation affects firms of more than 250 people, meaning over 9,000 companies employing 15 million across the UK will be required to publish their data. The data will shoe the difference in average earnings between men and women, the difference in bonus payments, and the proportion of men and women in each pay quartile. The hope is that companies will be shamed into making a difference, and that women can use the data to find better opportunities.
For example, after disclosing how much they pay their highest earners, the BBC is under intense scruting over the difference in pay between men and women. Now, their top female talents have joined together in signing a protest letter to pressure the broadcaster to tackle their gender pay gap.
Paying a woman a lower wage for equal work just because of her gender has been illegal for over 40 years. So why does the gap persist?
In June, Virgin Money were among the first to publish their gender pay gap data. The firm revealed that fixed pay for female staff was 32.5% lower on average, and had a bonus gap of 45%. They argued that they pay men and women the same for similar work, but the gap reflects the underrepresentation of women in senior roles.
TSB Bank revealed their mean gender pay gap is 31%, and a mean bonus gap of 53%. What was the issue they also cited? The unequal proportion of men and women in senior roles - in face, TSB calculated that if they were to teach 50:50 gender split across all levels, their gender pay gap would shrink to 1%.
Ann Francke, chief executive of the CMI, identified the same issue: "[the gap] reflects the failure to achieve a balance of men and women in senior management roles, or to attract and retain women in some of the better renumerated occupations."
Thus far, only 38 employers have published their data, with TSB and Virgin Money as the only two financial institutions to do so. We suspect the trends in other firms will be similar. So, what can we do to close the gap, apart from wait 52 years?
Change needs to be focused around being able to hire, retain and promote top female talent - regardless of situation. Overall, what's really needed is a commitment to culture change: flexible working, shared parental leave, gender-balanced shortlists, women returners programmes and open conversation about the issues.
Aiming for 50:50 at all levels will not only reduce the gap, but also allow the industry to benegit from the contribution of talented women, and provide all with the opportunity to succeed in financial services.
It won't be easy - but it will be worth it. Over the past week, we've seen the backlash the BBC has receives, and it's clear that people care. With the remaining 9,000 companies having to publish their pay gap data in the next year, now is the time to demand action.
The information due to come out over the next 12 months will be illuminating - will investment banks and managers fare any better than the more retail end of the market? Our expectation is probably not, and the excuses will be very similar to those already given.
Obviously work needs to be done to retain and promote more women, but perhaps more so in recruitment. Doing things in the same only way, producing the same results, and recruiting the best
man person for the job are all at the heart of the problem.
From middle management to the very top, there are plenty of capable women to do the job. If your recruiters are not finding them (doing things in the same old way), and you're looking for the best woman for the job - look no further than E2W.
You can access the gender pay gap data reported so far by following this link.
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