Most Brits underestimate their employer's gender pay gap, study finds

Employers need to be ‘open and honest’ about their remuneration data, experts say, calling on businesses to publish action plans for closing their gaps

Most Brits are underestimating the size of their employer’s gender pay gap, a study has found, with experts saying this underlines the need for businesses to publish narratives alongside their pay gap data.

A poll of 1,000 UK employees, conducted by CIPHR, found that half of workers, including 59 per cent of women and 52 per cent of men, believed their employer had no gender pay gap, while only a third (36 per cent) believed their employer had a pay gap that favoured men.

This is despite the latest round of reporting showing that four out of five employers that have disclosed their pay gap figures had a pay gap that favoured men.

Claire Williams, director of people and services at CIPHR, said the findings show the importance of employers reporting their gender pay gaps. 

“The UK’s gender pay gap is slowly closing, thanks to years of reforms and inclusive policies and initiatives. But these changes don’t just happen by themselves,” she said, adding that  better representation of women and ethnic minorities at all levels of business was “vital to ensuring that pay gaps are reduced more quickly”.

The research suggested that people’s reluctance to discuss pay was part of the problem.

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More than a third of the workers polled (36 per cent) said they didn’t talk about their salary with spouses or partners, while roughly the same proportion said they were actively discouraged from talking about their salaries with colleagues, despite having the legal right to do so.

One in 20 of those polled said they were banned from such discussions because of pay secrecy clauses in their contracts.

The Equality and Human Rights Commission, alongside other groups, has been calling for businesses to put more emphasis on gender pay gap reporting over the last few weeks, citing concerns that the pandemic has pushed it onto the back burner.

Charles Cotton, senior performance and reward adviser at the CIPD, said reporting was important not just to allow investors and customers to hold businesses to account, but also to better inform staff.

But, he added, publishing pay gap figures alone is just the first step to making changes.

“The CIPD has always argued that publishing gender pay gap figures on their own is meaningless and this research underscores just how important an accompanying narrative – which explains what the figures mean – and an action plan are to an employer’s fairness strategy,” he said.

This was echoed by Sheila Attwood, managing editor of XpertHR, who said firms needed to be “open and honest with their reporting”.

“This year, the narrative accompanying the figures may be especially important to explain any discrepancies, including as a result of having employees on furlough,” she said.

“Employees clearly have a view on the gender pay balance in their organisation, and many want to include this as a factor when job hunting, so employers have a lot to gain from meeting their needs in this area by providing the information up front.”

Caroline Bernard, director of communications at Young Women’s Trust, said the findings are “deeply concerning”, and that they suggest a “culture of secrecy around salaries is reducing awareness of the real and urgent problems of the gender pay gap”.

She said the government’s decision to suspend gender pay gap reporting during the pandemic has worsened the situation.

“The lack of salary transparency can also make it impossible for employees to know if they are paid less than their colleagues who are doing an identical role,” said Bernard

“We are calling on employers to commit to showing the salary, and not ask applicants about their salary history.”