Are you struggling to understand why you have a gender pay gap, and what to do about it? Take comfort – you are not alone, according to the findings of a Department for Education report - Employers’ understanding of the gender pay gap and actions to tackle it, (the DfE report) - which sets out how other employers are approaching the gender pay gap. In this Law-Now we highlight the key findings of the DfE report and suggest our own action points that may help you close your gender pay gap.

The DfE report

The DfE report highlights a mixed response to the new Gender Pay Gap Reporting Regulations (the Regulations). Specific points to note include:

  • Some employers reported a good understanding of the gender pay gap but could not provide a detailed or correct explanation of the gender pay gap when asked. This was typically due to confusion between the gender pay gap and equal pay.
  • Employer attitudes to reducing the gender pay gap varied widely, with 24% allocating it a high priority, 37% a medium priority and 33% a low (or no) priority. Many employers had not engaged with the topic before the introduction of the Regulations. Levels of understanding were mixed and somewhat superficial.
  • One of the main criticisms of the Regulations is the lack of remedial action planning, because the Regulations involve a duty to report and not a duty to act. However, there seems to be widespread resolve to introduce action plans to close the gender pay gap with only 20% of employers surveyed suggesting that they did not plan to take any action following the reporting process.
  • The most common measures included:

- offering or promoting flexible working (71%);

- promoting parental leave policies that encouraged both men and women to share childcare (65%);

- over half involved trying to change the organisational culture (51%);

- over a third included voluntary internal targets (39%); and

- over a third were considering women-specific recruitment, promotion or mentoring schemes (35%).

  • The greatest perceived barrier to reducing the gender pay gap was difficulty attracting women to the organisation or to certain roles, with 14% of employers surveyed finding it challenging to recruit or promote women, 10% highlighting the male-dominated nature of their sector and 5% identifying the fact that women do (or apply for) different types of job.

Options to close the gap?

What actions will work for your organisation will depend on what sector you operate in, and what types of roles are most affected. However, here are some suggestions:

  • Dive deep into the figures beyond the statutory calculations to:

- understand why you have a pay gap at grade level and identify why pay disparities exist. Does seniority and experience explain the difference between how you pay men and women?

- identify how many part-timers are women and how many are men. Look at the pay gap between part-timers and full-timers. Are there any explanations for these pay gaps?

  • Understand what areas of the business have a greater gap than others and focus your efforts on these areas.
  • Review how you bring in external recruits and conduct pay negotiations.
  • Review your annual pay awards and rewards packages. Ensure these are linked with your performance system.
  • Ensure you have a neutral performance management system. Are there any elements of the system which adversely affects one gender?
  • Review how your annual bonus pay systems operate.
  • Compare how many men and women were promoted from middle management to top tier in the last 5 years. Is there a significant difference in the ratio between the genders, or the timescales in the move to the top level? If so, why?
  • Do you need to adjust promotion opportunities for senior roles to enable them to include part-time/flexible working options?

Understanding and eliminating the gender pay gap is not easy and will not happen overnight. As Mercer recently reported there are a number of uncomfortable truths that need to be addressed in order to eradicate the gender pay gap. Their report into the technology sector in the UK bluntly explains that having a family hinders women’s earnings, that we value male dominated work in areas like technology more than the care sector, and that unconscious bias affects us all.

These issues need tackling head on. Taking action is about long term planning, particularly in sectors where female participation is low. Employers, who have yet to report, have less than three months to do so and decide what actions they want to introduce to reduce their gender pay gap.

With the EHRC having now published their draft enforcement strategy, and with the relentless media coverage, organisations that do not take this issue seriously are seeing they will be called to account one way or another.