Blog

3 May 2017
The gender pay gap – it’s bigger than we expected

Ahead of a new law that requires companies to calculate the difference between the average and median hourly pay rates for all male and female employees, with and without a bonus, a handful of companies have released their numbers in advance. All companies will be required to publish the results of their pay-gap report on their websites by April next year, a measure that supporters say will help close the gap in gender pay.

As companies in the UK prepare to make public the difference between what their male and female employees earn, early reports from some have revealed huge pay gaps as high as 36% which is twice the national average.

UK workers support disclosure. In a survey conducted by Glassdoor, 58% said the Government should force employers to declare salaries in order to combat the unequal pay that we have become accustomed to.

The national pay gap is a little more than 18%, according to Government statistics. The fact is that men hold a bigger proportion of senior jobs and high-paying roles. Throughout the UK, women hold 60% of the lowest-paying jobs, while men make up 60% of the top paying posts, according to data from the Confederation of British Industry.

Women hold just 12% of jobs paying £150,000 or more. The Government highlights gender pay gap reporting as “key to accelerating progress”, but also maintains that the policies currently in place — on shared parental leave, flexible working, and supporting women back into work — are adequate.

“The way men and women are segregated into different job functions is the biggest driver of the gender wage gap,” said Andrew Chamberlain, chief economist at Glassdoor. It uses it’s self-reported data from job seekers to evaluate job title, experience etc to understand how men and women with similar backgrounds are paid differently. With this, men in the UK still earn 5.5% more than women, compared with a 5.4% gap the US, he said.

Expert Market conducted research into European industries and gender pay gaps across Europe. Data revealed that one of the quickest areas that women are closing the gender pay gap are the Sales and Service roles. The UK remains one of the poorest performing nations, however, and Expert Market writes:

‘Even the most optimistic of potential closure rates saw women working in Britain not set to close the gender pay gap until 2031 even when working a Sales or Service role.’

A number of countries are set to close the pay gap in managerial roles as early as 2017, for example: Latvia, with its pay gap difference of €1.50. Elsewhere; Slovenia has a pay gap of €2.13 which is set to close in 2018, while Bulgaria, Czech Republic and Denmark have a tentative date set for 2022.

In a report published in February, the Women and Equalities Committee argues that the Government will fail to achieve its goal of eliminating the gender pay gap within a generation if it continues to ignore evidence presented to it, and overlooks the deeply entrenched structural causes of inequality.

Anthony Fincham, a partner at law firm CMS, explained why the new requirement is unfair. “If employers are not responsible for all the problems, they cannot be held accountable for all the solutions,” he wrote. Affordable childcare, better career advice and education are all needed to bring women’s compensation in line with men’s, he said.

We won’t know the true extent of the pay gap until all reports are published next April. In the meantime, we must each focus on our worth in our jobs whether we are male or female.

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