Employers must make ‘action plans, not excuses’ over gender pay

Second round of reporting sees median pay gap increase, but experts say narratives are more important than data

Employers must make ‘action plans, not excuses’ over gender pay

Employers must make “action plans, not excuses”, experts have said, as the second gender pay reporting deadline saw the median pay gap for full-time workers increase to 9.6 per cent in 2018/19. 

Analysis by Jon Boys, labour market economist at the CIPD, found 10,463 public and private sector organisations filed gender pay data in time for the final deadline at midnight on April 4 – approximately 99 per cent of eligible firms. This was an improvement on the first round of reporting where around 7 per cent of organisations filed data late. 

The median gender pay gap for full-time UK employees in the 2018/19 reporting year was 9.6 per cent, up from 9.2 per cent in 2017/18.

The proportion of organisations paying men more than women had also increased; almost eight in 10 (77.8 per cent) in this year’s round of reporting, compared to 77.1 per cent in 2017/18. 

Organisations with some of the largest gender pay gaps included Countrywide Services at 60.6 per cent, down from 63.4 per cent; Independent Vetcare at 48.3 per cent, down from 50.5 per cent; and easyJet at 47.9 per cent up from 45.5 per cent.

The proportion of companies filing statistically impossible data, such as pay gaps over 100 per cent, has decreased in the second round according to CIPD analysis, suggesting organisations are getting better at the reporting process, despite roughly a quarter not filing their data until the final 36 hours before the deadline. 

Commenting on the figures, Charles Cotton, senior reward consultant at the CIPD, said there were a number of internal and external influences on changing gender pay numbers. 

“We aren’t dealing with exactly the same sample size year-on-year because of the changes organisations go through – Carillion and LK Bennett would be absent from this round of reporting, for example, but other organisations may have grown in scope and be reporting for the first time,” he said. 

“Within organisations, gaps can be influenced by recruitment, training or development, and some factors outside the workplace, such as caring responsibilities and the proportions of men and women taking certain subjects at university. It’s a very broad landscape.”

The most meaningful action employers could take, he added, was to make a commitment to understanding their figures and explain them both internally and externally of their organisation. Two-thirds (66 per cent) of organisations supplied external URLs pointing towards information on their gender pay gaps in the second reporting round, although this is not a mandatory part of the process. 

“If organisations [don’t provide narratives] there’s a strong chance the government will force people to do it anyway,” Cotton said. 

“People need to treat gender pay as an opportunity rather than doing a compliance tick-box approach that won’t get the engagement of their employees.”  

Sam Smethers, chief executive at The Fawcett Society, echoed the call for more progressive action, adding that gender pay enforcement regulations were not strong enough in their current state. 

“It’s time for action plans, not excuses... Employers need to set out a five-year strategy for how they will close their gender pay gaps, monitoring progress and results,” she said, adding: “[The] government needs to require employers to publish action plans that we can hold them accountable to, with meaningful sanctions in place for those who do not comply.” 

While closing the gender pay gap demands a long-term cultural shift from organisations, experts have stressed there is a clear economic incentive, as well as a moral case, for doing so.

“Research estimates that £150 billion in GDP could be raised by closing the gender pay gap,” said Ornella Nsio, policy advisor at the Recruitment and Employment Confederation (REC). 

“It is vital that the UK’s businesses continue to strive to close the gender pay gap – not just because it’s the right thing to do, but also because of the strong business case for it.”