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Will the Gender Pay Gap reporting obligations make any difference?

Written by FCSA Business Partner, MyDigitalAccounts

Are Men and Women Equal and will the Gender Pay Gap reporting obligations make any difference?

What must be reported?

The prominent pay gap between men and women though hidden has been a long-standing issue within many industries, but now entities with over 250 employees are legally required to submit the mean and median figures of male and female salaries (including bonuses) for the 12 months ending 31st March each year. Entities have 12 months to collate and submit this data (i.e. figures for the year ended 31st March 2018 will be published no later than 31st March 2019). The format is as follows:

What is the current situation?

In comparison to our European neighbours, the Business Energy and Industrial Strategy committee (BEIS) found that the UK has one of the highest levels of unequal pay with more than one in eight large organisations having an unequal gap of over 30%.

It is especially problematic within the tech industry (which is still largely male-dominated) where the gap is 25% compared to the UK’s overall 18% (for more information, click here).

Why are men paid more than women?

The reasons why the pay gap exists is hard to pinpoint but may be may be due to the fact that there are more women in part-time positions than men, and part-time positions tend to be less senior due to the workload amount.

In order to establish a root cause to any issue one can apply the “5 Whys Test”.

By asking “Why” 5 times, (sometimes you don’t even need 5) you eventually get back to the root cause, for example, career breaks (for example due to pregnancy) affect earnings:

  • Why are women more likely to take career breaks?

Answer: Because men are generally paid more than their partner, it is more likely that the female will maximise their (for example) maternity/paternity leave entitled then their male partner

  • Why are men generally paid more than their partner?

Answer: because they generally take fewer career breaks

  • Why do men generally take fewer career breaks?

Answer: because in pregnancy, for example, it is more affordable for women to take the career break

This ‘circuitous’ logic implies that external (government) action is required to break the cycle.

Will Gender Pay reporting “Fix” the issue?

Only time will tell on this question, but the oxygen of publicity will ensure that, where there is a gap, employers are forced to consider why and explain the reasons. This, in itself, will at the very least raise awareness if not, correct the differential.

What has happened so far?

Recent independent statisticians report suggests that one in six organisations have “misreported” their figures and many are calling for the net to be widened to medium companies (those with more than 50 employees).

BEIS stated there is still evidence that the highest pay gaps are in smaller companies and further action is required to address this.

BEIS have also criticised the government for not clarifying the sanctions that would be put in place if an organisation failed to publish its reports as those who still have not published their reports have no official penalty in place to encourage compliance (click here for more information). 

The Future

Sexism was undeniably a factor in the UK workplace for almost all the last century. There is no doubt that the workplace is much more conscious of gender inequality than it was, and great strides have been made in terms of attitudes, pay and opportunities.

It will take more than a generation to fix the issues of gender inequality but reporting on gender pay gaps is a great start because it is objective data. This gives us a the platform to debate the reasons and, perhaps in applying the 5 Whys, we can all find some of the answers as to the real reasons why women are paid less and address the root causes and not just be histrionic about the symptoms.