The gender pay gap is the difference, on average, between the hourly wages for men and women.
Since amendments to Equality Act were made in 2017, companies that employ more than 250 people are legally required to report their gender pay gap figures by the end of the financial year.
Organisations must also reveal the proportion of men and women who receive financial bonuses.
The World Economic Forum in December 2018, reported that it might take 202 years to close the gap at the current rate.
What is Equal Pay?
The gender pay gap is not the same thing as ‘equal pay’. Unequal pay means that women are paid less than men for doing exactly the same job.
Equal pay has been a legal obligation since the Equal Pay Act, which was introduced back in 1970. Despite this though, according to Fawcett Society chief executive Sam Smethers, pay discrimination remains rampant.
She said, ‘We know from our Equal Pay Advice Service that it is still happening. Gender pay gap reporting does not necessarily give women the information they need to challenge unequal pay. For that, they need to know what their colleagues earn. Most employers say they don’t have an issue – but unless they’ve conducted an audit and set up a transparent pay framework, how would they know for sure?’
A famous example of this is when the BBC became ensnared in controversy back in 2017 when the organisation published a list of its highest-selling presenters, which revealed a considerable imbalance between the rate of pay between male and female presenters.
The Equality and Human Rights Commission is hoping to conclude its investigation into BBC in Spring of this year.
How is the Gender Pay Gap Estimated?
Business must produce a gender pay gap report in six figures. This includes the median gender pay gap, mean gender pay gap, amount of males and females receiving bonus payments and percentage of males and females in each quartile band.
• The mean gender pay gap is calculated as an average, by adding up all the wages of both male and female employees and dividing the figure by the number of employees. The pay gap is the difference between the mean statistics for both sexes, which must be reported as a percentage.
• The median gender pay gap is calculated by taking each male and female employees’ wages from highest paid to lowest and comparing the number that sits in the middle for each gender.
The difference in salary between two people of different genders is the pay gap figure. This figure doesn’t take age, or experience into account, but it will still be seen as the representative calculation because the mean gender pay gap figure can be biased because of particularly high paying employees. This is why the median gender pays gap figure that is more commonly used.
What’s Your Gender Pay Gap?
If you work for or own a business with more than 250 workers, you’ll be able to find the gender pay gap on the Government Equalities Office website.
Companies that have fewer than 250 employees aren’t legally required to declare their gender pay gap – although some smaller businesses have done so voluntarily.
Gender pay gaps and the reason for it can differ between companies. By publishing and monitoring pay gaps, it will help employers to identify reasons for the difference and develop action plans to close it.
For instance, if women are generally working in lower-levels within an organisation, an employer may want to produce action plans to help and encourage more women to apply for roles in senior positions.
Alternatively, if women in an organisation are more likely to work part-time due to childcare commitments, the employer should take the opportunity to roll out flexible working policies and further promote shared parental level.
Closing the Gender Pay Gap
The Equality and Human Rights Commission recommends closing the gap, with the following suggestions:
• Look at the differences in subjects and career choices between males and females
• Work on improving workplace opportunities for all, no matter their background, by investing heavily in training
• Encourage both men and women to share equal childcare responsibilities by increasing and incentivising paternity leave
• Increase diversity across all sectors by addressing recruitment, promotion and salary bias, by introducing national goals for senior and executive management
• Extend pay reporting to include ethnicity and disability
• Companies have a duty to close the gender pay gap, rather than to allow incidents that widen it.
A Word from the Hales Jobs Managing Director
“The results of our gender pay gap analysis are extremely positive again this year, and we will strive to maintain these results by maintaining our commitment to pay parity in comparable roles and continually reviewing our diversity and equality initiatives.”
We’ve highlighted our gender pay gap statistics here.
If you’re interested in finding out more information on our gender pay gap policies, or you’d like more information about what we do, don’t hesitate to contact us today.