Slow progress in narrowing gender pay gap - Lisa Byars

Energy companies engaged in efforts to encourage more women to work in the industry – and to retain and promote those already in the sector - are having a positive impact on the Gender Pay Gap (GPG).

Lisa Byars, Senior Associate and employment law specialist at Pinsent Masons

Data gathered by the government and analysed by Pinsent Masons, showed approximately 97 employers working within the UK energy sector have reported their gender pay gap for the year 2021-2022.

Of the electricity or gas suppliers that reported GPG, our study shows that women are paid approximately 16% less per hour than men - roughly on par with other industries - while of the oil and gas companies that reported, there was a median gender pay gap of approximately 20.2%.

On average, there is an 18% difference in the mean bonus payments to men and women when looking across the energy sector employers whose data we analysed. This difference is higher than the industry would like to see, but it compares favourably to other sectors and one reason for this is the huge push there has been for greater diversity and inclusion in the sector.

Most oil and gas operators have been showing a year-on-year improvement on GPG since reporting began in 2017, with several companies reporting improvements of up to 5%, however, despite some notable improvements, progress across the industry is generally slow.

There are many positive examples of energy sector businesses taking steps to improve gender equality and address pay disparity, with a number of employers putting diversity and inclusion at the top of their agenda.

One offshore wind employer has improved its median pay gap by approximately 23% since 2017. Women in the organisation now earn on average 6% more than men, reflecting the positive initiatives implemented by the company to strengthen its equal pay evaluation, and to focus in a meaningful way on diversity and inclusion, and the importance of this to its business.

One underlying cause of GPG is the shortage of women working in the STEM sectors and while efforts are being made to address this by education providers, and by employers at the recruitment stage, it appears this is yet to have a significant impact.

Job-specific factors are also relevant to the cause of the pay gap, particularly where more men are typically earning additional call-out and unsocial hour allowances compared to women. This is particularly the case within oil and gas, where offshore workers earn offshore allowances, travel allowances and other additional payments to reflect the rotational working pattern.

The transition to net zero has the potential to provide a new range of jobs for women, but a study by PwC found that men can expect to get twice as many new jobs than women in the energy sector. This needs to be addressed quickly to avoid the historic gender imbalance within the sector being carried through the energy transition.

A business’ approach towards diversity and inclusion is an increasing differentiator in the battle to recruit and retain talent. Employers that are lagging behind should turn to the positive initiatives that others in the sector have implemented, and consider how they could adopt or adjust these to fit their own businesses.

Lisa Byars, Senior Associate and employment law specialist at Pinsent Masons