Analysis by PwC has showed that almost half of UK companies reported an increase in their gender pay gap last year. Across the businesses studied, women earn on average 87p to every £1 earned by men.
Gender pay gap reporting has been compulsory for businesses with over 250 staff for 5 years or so now and the PwC analysis shows that the gap has only declined by 0.5% in that time. Although anecdotal evidence suggests that COVID and lockdown may have contributed due to the larger number of women furloughed or taking time off to care for children during school closures, this 0.5% figure means that the gender pay gap would not disappear until 2151.
Many companies are taking steps to increase the number of women in the most senior posts and FTSE350 companies will be required to have at least one woman in the role of Chairman, CEO, finance officer or senior independent director by the end of 2025.
IFS data goes further and shows that since 1995 the pay gap ahs narrowed from 24% to 19%.
Although there are many reasons behind the gender pay gap there are steps employers can take to help close the difference, starting firstly with identifying what the pay gap is within your business. Given the ongoing challenges in recruiting and retaining talent resolving gender pay gap issues and being able to demonstrate that could make your business more attractive.
As a start point those businesses required to publish their gender pay gap data must publish the average pay gap and also the median pay gap for salary and bonuses. They can then provide further data and explanation for any gap which exists. The same exercise can be helpful to all employers to assist in eradicating the cultural biases which may be influencing their pay levels. For example if a male employee generates 10% as much profit for his employer than a female employee then paying a salary 10% higher than the female employee’s salary would be justifiable. However paying a 10% higher salary to a male employee who used to generate 10% more profit than a female employee but the female employee has last year made as much profit as the male employee, is problematic and you would need to look at why you are still paying the male employee so much more.
If you can identify these discrepancies in pay and resolve them you potentially become a far more attractive proposition for potential candidates considering taking a job with you.
If you have any queries about the gender pay gap or pay more generally please contact our Employment Team on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.