Moving beyond the narrow lens of gender pay reporting

Posted on: January 3rd, 2018

All organisations with more than 250 employees need to report on the gap in pay between its male and female employees. It has created for some organisations, notably the BBC this summer, some awkward headlines, as Leon Deakin explains.

Following the BBC’s release of its gender pay figures and the high-profile claims by Asda retail store workers seeking to compare their remuneration to those in the distribution centres, equal pay has been firmly in the headlines for the wrong reasons. Conversely, other companies have seized the initiative and moved beyond gender by reporting on other characteristics such as race and ethnicity. 

Now is, therefore, a good time to look again at the current gender pay requirements, but also consider whether it will become best practice and part of good risk management to go further than the law currently requires and report on other protected characteristics.

As a recap, the requirement from 6 April 2017 was for employers in Great Britain with more than 250 staff to publish four different figures annually in relation to the following: 

  • Gender pay gap (mean and median averages);
  • Gender bonus gap (mean and median averages);
  • Proportion of men and women receiving bonuses; and
  • Proportion of men and women in each quartile of the organisation’s pay structure. 

Struggling to close the gap 

Gender pay reporting has left some organisations facing difficult headlines. Whilst the BBC dominated the news following the revelation that the highest paid female earned between £450,000 and £500,000 compared to the highest paid male who earnt between £2.2 million to £2.25 million, it is not alone. 

Deloitte recently published a study into the gender pay gap in the technology sector in the UK, examining data over the past 15 years. The study found that women made up a tiny 14.4% of workers, ultimately highlighting the under representation of women in the sector. The study also forecast the existing pay gap would not be bridged until 2069.

There are, unsurprisingly, a plethora of opinions as to why this is the case. One rather unfortunate now ex-Google employee’s internal memo made headline news when he attributed it to inherent ‘biological differences’ and that women’s biological traits make them less aligned to become coders at Google. More encouragingly, some of the biggest names in the technology sector have pledged specifically to address this issue; Virgin Media have gone as far as to pledge to achieve a 50:50 gender balanced workforce by 2025. 

Getting ahead 

An interesting contrast can be seen in the case of PwC, which gained largely positive press by taking the gender pay gap reporting requirements as an opportunity to get a step ahead and report on other characteristics such as Black, Asian and Minority Employees (BAME).

Indeed, even though PwC’s figures revealed that there is a pay gap between BAME staff and others, it attributed this to the fact that, statistically, ethnic minorities filled the lower paid roles which unsurprisingly led to a gap between those at the bottom and top of the pay scale. PwC’s strategy as a result of their findings is to retain as many BAME employees at a junior level to increase diversity across the business in years to come.

Of course, a more interesting consideration could perhaps be why BAME employees are more likely to be employed at a junior level, but by driving the agenda at a faster rate than required PwC is more likely to be able to control it. All this raises many questions with potentially difficult answers. However, for those now required to report on the gender pay gap, it is absolutely crucial to interrogate the raw data obtained and consider not just how to explain or justify the findings to avoid costly claims, but to actually grasp the nettle and try and use findings to launch an effective diversity strategy. This is, by no means, an easy task, and it may be a wise investment to take some advice in relation to how best to do this. 

In addition, while it is currently only a legal requirement to report on the pay gap in relation to gender, it could be genuinely beneficial to explore other characteristics, such as race, ethnicity and, perhaps, even disability in order to truly understand diversity in the work place and address the barriers that prevent people from reaching their potential. 

Going beyond the narrow lens of gender pay reporting and exploring other characteristics could assist in achieving a fairer and more equal work place and ultimately attract and retain employees.

Leon Deakin is a Partner and Head of the Employment team at Coffin Mew.