The gender pay gap figures have been a hot topic over the past few weeks as the 2018 deadline for reporting has passed. With approximately 1,500 qualifying employers still needing to report, what is the emerging picture?
Many of those who have published have had to deal with delicate publicity situations in which imperfect statistics, incendiary headlines and confusion have created a perfect storm. The data indicates that the national average pay gap is 9.8% with financial services, education and construction industries reporting gaps significantly above this average.
As the dust settles, we try to dispel some myths surrounding the gender pay gap statistics and analyse what the information is likely to mean long term.
Myth: A significant gender pay gap means that men and women are not being paid equally.
Fact: The gender pay gap and equal pay are two separate but equally important issues. It is illegal to pay men and women different amounts for doing the same job and equal pay is not something that the gender pay gap figures highlight. Disparity in gender pay figures tends to be a sign that companies have more higher-paid male workers than female. As companies are required to report on their gender pay gap over a number of years, the emphasis should be on what they will now do to narrow this gap and show long-term progress.
Myth: The gender pay gap statistics for 2018 have just been released.
Fact: The snapshot date for private and voluntary sector organisations is 5 April of each year. Companies then have 12 months from this date in which the can publish the information according to the prescribed format. The first snapshot date was 5 April 2017, meaning that the information that has just been released therefore reflects the position of the gender pay gap in companies on 5 April 2017.
Myth: Bonus figures are not affected by part-time employees.
Fact: Pro-rated bonuses paid to part-time employees are not converted into full-time equivalent figures under the gender pay gap rules, the actual amount of the bonus is included in the calculation. This means that if an employer has a significant number of female part-time employees, the figures could potentially distort the bonus gap. The Government suggests organisations deal with this in their supporting statement which accompanies the pay data.
Myth: Partnership information must be included in gender pay gap calculations
Fact: Under the gender pay gap rules, partners who are deemed to be self-employed do not need to be included in gender pay gap figures. Although companies can choose to include partners in their calculations, and numerous companies are under pressure to do so, many have not. By removing the top-earning partners from the equation, especially if they are mostly male, figures show a lesser gap than they likely would otherwise.
Myth: It will be expensive to get rid of the gender pay gap.
Fact: Information about the gender pay gap should help organisations assess the overall levels of gender equality as well as identify what can be done to rectify any imbalances. Changes tend to involve looking at attitudes and practices rather than financial expenditure. There may even be some benefits, as policy developments could result in an improvement in staff retention, saving companies money. Additionally, it is estimated that closing the gender pay gap by 2025 could add £150 billion to UK GDP, providing a wider economic benefit.
As organisations will be reporting on the gender pay gap over a number of years, the real value in the statistics will arguably be in their ability to illustrate the reduction of the gender pay gap. Although each industry will have its own specific factors at play, the focus is likely to be on whether the gap is shrinking and if companies are implementing measures to achieve this goal.