The Gender Pay Gap

Posted on April 10, 2017 · Posted in Accounting & Business

Public bodies have often led the private sector when it comes to progressive employment practices.  But it is different with gender pay reporting – the government demanded that others got their houses in order first.  Gender pay gap reporting was introduced for large private and voluntary sector organisations in Great Britain in October last year.

 

The move was widely welcomed.  Emma Codd, managing partner for talent at Deloitte UK, responded: “This is an important milestone on the journey towards greater gender parity at all levels within large UK businesses. Being able to access information about the gender pay gap will enable people to make better-informed decisions about potential future employers, and will also allow companies to consider gender pay data when selecting suppliers and partners.”

 

Ms Codd added that without more effective action to tackle gender pay disparity, pay equality would not be reached until 2069.

 

The Government has accepted that it “is only fair in that what we ask of business we should expect of ourselves,” as women and justice minister (and education secretary) Justine Greening explained at the end of last year.  Under new proposals, large public bodies will have to begin recording gender pay information in April this year and publish the date before April next year.

 

“It is another positive step in improving diversity and, specifically the gender pay gap, that the Government is widening out the remit of the Gender Pay Regulations to include the public sector,” commented PwC partner Ed Stacey.  “Whilst the pay gap in the private sector remains ahead of that in the public, there is still significant room for improvement across both. The publication of pay gaps will be a good means to help address that challenge.

“At PwC, publishing our gender pay gap has allowed us to understand the reasons for the gap and hold ourselves accountable to make changes. For example, we know that a sizeable part of our pay gap is a result of having fewer women in senior positions, so this is an area where we continue to focus our efforts. We’re also challenging our recruitment processes, making more senior jobs available as flexible or part-time and have introduced a return to work programme.

“In our experience there is no silver bullet and the gender pay gap is just one data point that organisations should be tracking as part of their overall efforts to create a workplace that works for all.”

 

The move towards pay gap reporting has been strongly endorsed by the public sector trade unions – though they are calling for it to be supported by additional actions.  UNISON represents workers in local government and the NHS.  Its national women’s officer Sharon Greene said: “Unfair treatment of women over pay is still a major source of inequality in the UK.  The Government’s proposals will go some way to highlighting this discrimination in the public sector, but monitoring alone won’t solve the problem.  What’s needed is greater access to childcare and more high quality part-time jobs to ensure women earn the same as men.”

 

A spokesman for the main civil service union, the PCS, added: “We support any effort to close the gender pay gap.  One way to help tackle it in the civil service would be to restore national negotiations on pay, instead of relying on more than 200 sets of talks across government departments and agencies, which is not only wasteful and time-consuming, it causes massive inequalities.”

 

Su Maddock is Visiting Professor at the University of the West of England and a former Director of the Whitehall Innovation Hub, who has taken a close interest in gender equality over many years.  She argues that gender pay reform is taking far too long.  “Pay inequality is lower in the public than the private sector, at 18.5% in the public and 25.3% in the private sector,” she explains.  “Culture is clearly changing across employment sectors, with the gender pay gap as a whole falling – but very slowly.

 

“Despite The Equal Pay Act introduced 45 years ago, women still earn less than men especially for jobs where women dominate the workforce, such as in child care, social care, etc.  The gender pay gap is now 13.9% across the UK.  The situation is much worse at either end of the pay spectrum.  At the top, only 5% of FTSE Top 100 CEOs are women.  By contrast at the bottom-end, 60% of low paid workers are women. As the economy becomes more and more fragmented, the gap between the low paid and wealthy increases, disproportionately affecting women.

“Why have we been so poor at valuing women at work?  Gender audits have tended to ignore the influence of male work cultures which influence management’s decisions about job criteria, pay and performance assessment – all dependent on value judgements about who is worth more.  Age-old, gender stereotypes demote women’s contributions to and at work.  This is more subtle in 2017 than in 1990s, however.  Very senior women report that if they challenge, their view is not acknowledged as valid until a man agrees, or that if they come out with a particularly impressive point they’re asked, how do you know that?  Women and men reinforce traditional gender stereotypes which underpin value judgements about what to measure and who to promote and who deserves financial rewards.

“The Equal Value Act was supposed to remedy this. However, while some individual employers may pay individual women managers more, the cost of paying a group of women workers more really impacts on budgets as many local authorities have found after re-grading cases. The gender pay gap demands a political debate and reframing of economic value.

“As the low wage economy takes root as the UK economic model after Brexit,  the economy will become even more dependent on wealth creation, smart technologies, financial innovation where manufacturing becomes a specialist activity and jobs move from manufacturing to warehousing and robots.  The political voice for revaluing human skills, human care and social capacities could move closer to centre-stage than anticipated.

 

“There is work to be done on policies and accounting systems which value human capacities and social relationships, because while you may not mind your car being made by robots, do we want robots looking after your baby or granny?”

 

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The consultation includes proposals to introduce gender pay reporting in large public bodies – those employing more than 250 people – in England.  This is different from the private sector requirement, which applies to England, Scotland and Wales.

 

Consideration had been given to making the obligation apply to small public bodies, but it was decided that this would be too onerous.  Pay reporting will cover basic pay, plus bonuses, but not overtime.  The reports will have to be made publicly available on an organisation’s website.