Gender Pay Gap: Five things employers need to know about pay and women

Sir Philip Hampton recently caused controversy by suggesting that women at the BBC allow the pay gap between men and women to exist. His comment is concerning given that he has been appointed to co-chair a government review into how to increase the number of women in senior business roles, but is there any truth in what he said?

Vicky Schollar, Senior Solicitor at Blake Morgan LLP.

Here, Vicky Schollar, Senior Solicitor at Blake Morgan LLP explains how employers can treat employees fairly and try to ensure that all employees are treated fairly when it comes to pay (irrespective of their gender or any other protected characteristic) and how employers can explain and redress any gaps.

What is the gender pay gap?

It should not be confused with equal pay legislation.  The gender pay gap is the difference in average pay between men and women across an organisation/sector, whereas equal pay makes it unlawful to pay people differently based on gender for doing equal work.  There may well be a connection between the two if the equal pay legislation is not being adhered to.

In the UK women earn 18.1% less than men.  In the BBC the gap is 10%.

Why is there a gender pay gap?

There is no single answer but the most obvious reasons why women on average are paid less than men are as follows:-

The “glass ceiling”.  There is often a barrier to women advancing within a profession – they are promoted so far and then prevented from reaching more senior roles. If women are not employed in the most senior positions to start with then they won’t earn as much as men. In addition they won’t be in a position to change the status quo by encouraging working practices which allow women to break through the glass ceiling and be promoted.

Historical and institutional bias still exists with women sometimes viewed as being less capable than men and they are paid less as a result.

Women who take time out to have children may be out of the workplace for a year or more and this gap is often taken into account when deciding salary increases or promotions.  Their absence may be interpreted as them not contributing to the business thus justifying not rewarding them. As a result of men not having to take a break from employment when they have children and the low take up on shared parental leave, men are in a more favourable position to be promoted and to receive a pay rise.

More women than men work part-time, and as a result their earnings tend to be lower than full time equivalents, particularly if their part-time role limits what they can achieve or results in them having less experience. Some more senior jobs may also not be possible to perform part-time – although this is an assumption which HR teams may well need to challenge.

There is still a division between genders and sectors with women often working more in caring or customer service roles such as retail and care, which in turn are lower-paid than sectors typically associated with men such as science and IT.

Women may not be taking advantage of the equal pay legislation to enforce their rights either because they don’t know it exists or because they don’t want to “rock the boat” with their employers.  If correct then women may not be getting paid the same as men for like or similar work.

Some believe that women are not as forthcoming as men; that women tend to accept the status quo rather than challenging it. This may be a confidence/self-worth issue, but could also reflect a genuine difference in approach between the sexes. Women may find it harder to ask if men are the ones in power and making decisions about pay and promotion.  Some women may also believe they are not justified in asking for a pay rise, for example, if they are about to be or have been absent to have a baby or if they feel that their employer has been generous in facilitating flexible working.  For the same reasons women may be put off applying for more senior roles.

Gender Pay Reporting

This was introduced in April this year following the Government’s failed attempt for businesses to publish the information voluntarily.  It places an obligation on employers with 250 or more employees to publish an annual report setting out the percentage difference in male and female pay. Whilst currently there is no financial penalty for non-compliance, not doing so could damage an organisation’s reputation and may impact on its ability to recruit.

Given the limitations of the legislation there is a real risk that the gap will not be addressed by those employers with less than 250 employees.

Explaining any Gaps

If there are gender pay gaps then employers should examine the reasons behind the differences and what can be done to address them.  Failing to do so could lead to negative inferences being raised and adverse publicity.

Gaps may be explained by reference to a variety of factors some of which may not be because women are treated less favourably than men.

What can employers do to try and redress the balance?

We have come a long way in the last 40 years and the pay gap between men and women has narrowed thanks to the Equal Pay Act and subsequent legislation.  However, there is still some way to go. If employers do not want further intervention, then they need to take matters into their own hands by making cultural changes to attitudes and practices, as well as increasing pay. Some things that employers can consider are:-

Review salaries to ensure that equal pay legislation is not being breached and level up any differences in pay to reduce the gap.

Have clear and objective policies in place relating to flexible working, recruitment, promotion and salaries.  Setting out clear and objective criteria helps to manage staff expectations and provides transparent guidelines for decision makers. If these are followed then there could be a narrowing of the gender pay gap.

Review stats to see how many females apply for new roles compared to men and consider what can be done if there is an imbalance, especially in the over 40’s where the gap becomes more apparent as a result of fewer women returning to work or the same role after having children.

Employers should also look at what they can do to help women reach more senior roles and break through the “glass ceiling”.  This will include training managers and decision makers to challenge stereotypical assumptions (even if unconscious) – for example a view that part-time working implies a lack of commitment or is not possible in senior roles.

Encourage staff training and working in different areas of the business so that staff become multi-skilled. This may lead to a reduction in gender stereotyping. In addition, employers could link up with educational institutions so they can work together to encourage and support a move away from sectors which are heavily weighted in favour of one gender over another such as engineering.

Encourage and promote flexible working to allow more women to access the workplace by working from home or job sharing.

But remember employers are only one part of the jigsaw and that changing cultural attitudes and stereotypes in education are also essential pieces of the puzzle.

Employment Solicitor

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