Companies will soon have to reveal their gender pay gaps, and oil and gas firms must start considering the issue, writes Katie Williams
The oil and gas industry is dominated with stories of job cuts as employers react to the downturn and the price of Brent crude lurks around $50 a barrel.
Against this backdrop, it may seem strange to be advocating that employers should be attracting and retaining more women in to the industry by using the law as leverage, but that’s what I will be doing in Aberdeen at the world’s second largest oil show, as Offshore Europe rolls in to town next week.
The proportion of women in the UK oil and gas industry is reported to be 23 per cent compared to a 47 per cent national average, which worsens when narrowed to offshore staff with only 3.6 per cent represented. But, aside from moral and social arguments in favour of equal opportunities, why should employers be interested in increasing the participation of women throughout their workforces?
Research shows increased female representation can bring a range of benefits such as access to a larger talent pool, better financial performance, increased productivity, greater responsiveness to the market and stronger corporate governance. In the North Sea, the focus is now on realigning organisations to create sustainable businesses for the future. Strategies which could increase performance and competitive advantage should be highly relevant. My argument is that gender diversity should be considered as one such strategy, rather than seen as an add-on topic for the HR department.
At Offshore Europe I will explore themes such as flexible working, shared parental leave to boost the number of women in the sector, legal entitlement which allows positive action, and gender pay gap reporting.
Flexible working is a touchy subject because most employers will say there is absolutely no scope for flexible working in their organisation, and of course I am not suggesting that offshore shift patterns could be overhauled to make them more family friendly. But if these themes are rejected in their entirety without any exploration of potential business benefits in certain contexts, it could be a missed opportunity. The obvious challenge is the commercial pressure organisations are already under, and a lack of resources to look at these propositions. Not surprisingly, their immediate conclusion is that ‘this costs money’ and they won’t take it any further. However, other sectors like financial services have demonstrated the business case for greater gender diversity is quite compelling.
The counter argument is that, at a time when the primary concern of employers in the industry has become one of pure survival, something radical is needed. The continuous cycle of cut-cut-cut in hard times and recruiting back when things improve, seems to me to be unsustainable and we now have an opportunity to do things completely differently.
From next March - under new gender pay gap reporting regulations - companies with more than 250 employees must publish data showing the differences in pay between men and women. The national average difference is 19 per cent, but with a male-dominated workforce in the North Sea, I am guessing the average for the oil and gas industry will be considerably higher.
The first step is for employers to audit their pay structures, identify whether there is any disparity, then to understand the reasons why and assess whether gender inequality is an issue.
The process of auditing and reporting becomes a virtuous circle, because once the employer is required to publish the data this can empower women to take legal action. To avoid the risk of claims, employers need to address any results of the audit that suggest inequality.
The changing legal landscape requires companies to consider investment in this area to ensure compliance, no matter how hard times may be. Good data management is just the first step: the disclosure of a gender pay gap will require investigation into its causes and then remedial action. Exposure to potential litigation is not the only risk, as a poor track record on gender pay gap reporting could affect corporate reputation and an employer’s ability to attract and retain talented workers.
Increasing the rate of participation of women in the workforce should be considered as a strategic business issue. This means making some difficult decisions on how to facilitate gender diversity. The various legal entitlements provide tools for leveraging these decisions, but ultimately oil and gas employers must consider going beyond compliance and forge a way towards increased female representation and gender equality.
• Katie Williams is a partner and employment law specialist at Pinsent Masons. www.pinsentmasons.com