Pinsent Mason comment: Manufacturers are seeing cost of gender pay gap

Manufacturers serious about tackling gender imbalance and pay inequality should consider progressive measures, says Donaldson. Picture: Peter Devlin

The GPG reporting regulations apply to private and voluntary sector employers with 250 or more employees, while public sector employers are subject to a similar duty under separate legislation.

At Pinsent Masons, we analysed the GPG data reported by manufacturers and businesses in other sectors. Information disclosed by companies across the diversified industrial sector reveals a mixed picture, but provides examples of good practices that should be replicated and built upon.

The manufacturing sector has the eighth biggest GPG of all UK sectors and the results are particularly diverse, with median pay gaps ranging from more than 60 per cent to under five per cent, while some manufacturers even report of pay gaps in favour of women.

Overall, however, the median pay gap across the sector is approximately 10 per cent between male and female employees, significantly lower than construction (24 per cent), finance and insurance (22.5 per cent) and education (21 per cent). When comparing median hourly rates, female employees earn on average 90p for every £1 earned by their male counterparts.

Gender imbalance within the industry was highlighted in many reports as a major cause of the pay gap, with men occupying the vast majority of senior, highly paid roles. One manufacturer highlighted having long-serving male staff and low staff turnover as factors behind their GPG, and referenced the challenge of recruiting female staff to engineering or maintenance roles when vacancies arise.

A central factor is the significant shortage of women with skills in science, technology, engineering and mathematics (STEM). Only 24 per cent of STEM graduates in 2017 were female, and of these just 14 per cent were in technology and engineering. The challenge of retaining talented women, particularly following maternity leave, was also flagged in the GPG reports. A possible reason is that shift patterns in the manufacturing industry mean that employees often have to work unsocial hours and these types of work patterns are less attractive to those with childcare responsibilities.

At a sector-wide level, the campaign “Taste Success – A Future in Food” has been launched to promote job opportunities in the engineering industry. Companies such as Siemens are supporting the active promotion of STEM subjects in schools, which is particularly important in primary education as by the age of 16 only 35 per cent of girls elect to study mathematics, physics, computing or a vocational qualification.

Tunnock’s of Uddingston are among the companies actively seeking gender balanced shortlists to ensure diversity when recruiting, while many companies, including Cargill and BAE Systems, have introduced unconscious bias training.

In its “paradigm for parity” action plan, Cargill specifically addressed the culture of presenteeism that is sometimes seen as a barrier to career progression by women with child care commitments. The company will base career progress on results and performance, not on physical presence in the workplace.

More and more companies are recognising the importance of encouraging women to return to work within the sector following career breaks.

Manufacturers serious about tackling gender imbalance and pay inequality should consider whether they can adopt similar measures in their own organisations. Factor in the skills shortage, a major concern for manufacturers, especially in light of Brexit, and getting more women into the workforce and more senior positions is almost certainly a commercial imperative.

Susannah Donaldson, employment law expert at Pinsent Masons.