Comment: Lessons learnt from gender pay gap reporting

By Susannah Donaldson, employment lawyer at law firm Pinsent Masons. Picture: Peter Devlin.
By Susannah Donaldson, employment lawyer at law firm Pinsent Masons. Picture: Peter Devlin.
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It was something of a stampede in the final 24 hours, as more than one-tenth of employers required to publish gender pay gap (GPG) data rushed to meet the legal deadline.

The UK has a national average median pay gap of 18.4 per cent and of the 10,014 companies and public sector organisations that published data, more than 30 per cent reported a gap in excess of this.

The data showed nearly 80 per cent of employers pay men more than women, with an average median pay gap of 9.7 per cent, while 14 per cent of reported a pay gap in favour of women, and just 8 per cent reported no gender pay gap.

Not surprisingly, it was the blue-chip companies and high street brands that caught the blast of media attention, but delving deeper, the stats revealed stark differences in gender pay across the sectors.

The biggest GPG was in construction, with an average median gap of 25 per cent followed by the financial services sector at 22 per cent. These sectors also recorded particularly high bonus pay gaps.

The highest median pay gap was recorded by Millwall Holdings, the parent company of Millwall FC, at 80 per cent. JP Morgan revealed the biggest pay gap among the major banks at 54 per cent, and some women’s fashion and beauty brands, including Karen Millen, were within the worst 2 per cent of all employers.

Broader issues came to the fore, from the way organisations are structured to deep-rooted societal matters, including how to encourage more women to study Stem (science, technology, engineering and mathematics) subjects and to pursue careers in more male-dominated professions, how to facilitate better access to flexible working opportunities, and the need for greater shared parental responsibility.

While there is a distinction to be drawn between gender pay and equal pay issues, the GPG regime shone a spotlight on the wider issue of equal pay. Employees want to know they are receiving equal pay for equal work, and this is resulting in more open discussion within organisations. Staff want to understand what pay review processes look like, what checks and balances are in place to ensure that the process is fair, that steps are in place to prevent unconscious bias in the setting of pay, and whether their organisation has carried out an equal pay review.

It seems we are slowly moving towards a culture where discussions about pay are no longer taboo, where employees feel increasingly confident in questioning any disparities. Organisations need to be able to respond to questions of this nature effectively and meaningfully.

Although the statistics themselves have made for uncomfortable reading, most of the organisations I have come across still view this as a positive catalyst for change. It’s seen as a chance to have an honest dialogue with staff and the public about their progress on diversity and inclusion, the challenges ahead and their plans for addressing them.

There was understandably a lot of trepidation this year as all employers were going into the GPG process blind. However, the stakes will be even higher when companies report their 2018 data. There will be a point of comparison and it will be easy to discern whether the action plans outlined in employers’ 2017 reports have had the intended impact, or if they have been followed through with at all.

The success of the regime will be measured by whether it has helped bring more women in to male-dominated sectors and into higher-earning senior management positions.

It is not meant to be a quick fix – the intention is to generate sustained progress by shining a spotlight on female participation and progression in the workplace. Given the intense media scrutiny this issue has generated and the debate it has prompted in boardrooms and more generally, it’s safe to say that the regulations seem to be serving their intended purpose.

- Susannah Donaldson, employment lawyer at law firm Pinsent Masons.