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Can we close the gender pay gap before 2055?

27 Jun 2019 By Helena Rozman

Helena Rozman examines government guidance for employers on addressing gender pay issues

They were tipped as the biggest legislative progression for working women since the Equal Pay Act came into force in 1970. And since their introduction in 2017, the Equality Act 2010 (Gender Pay Gap Information) Regulations have had quite an effect:

  • In the regulations' inaugural year, more than 10,500 companies reported their gender pay figures. Subsequently, the Government Equalities Office found that reducing the gender pay gap (GPG) had become a priority for more companies than ever before;
  • It records that 69 per cent of employers now consider closing the GPG is a medium to high priority (an increase from 61 per cent last year) and 67 per cent are having discussions about ways to close the gap at board level. However, there is still some way to go before we reach full gender pay equality;
  • According to the Office for National Statistics (ONS), the GPG is at its lowest level on record. However, as of June 2018, the national GPG stood at 18.4 per cent as an average across all employees. A recent study conducted by easyMoney estimates that, based on present trends, gender pay equality will not be achieved until 2055

Even so, there might be ways we can accelerate the process. To help companies on their way, the government published two pieces of guidance in early February. It is hoped these will support employers by helping them identify potential causes of GPG in their workplaces, to develop effective plans to confront those issues and, in doing so, reduce the gap. 

The first publication helps companies ascertain the extent of their GPG and identify areas for improvement. For example, it encourages companies to consider whether:

  • women tend to enter the company in lower-paid positions than men;
  • there is a difference in performance scores within the organisation in relation to gender;
  • men and women leave the organisation at different rates; and
  • individuals who are employed on a part-time basis are being supported to advance within the company.

Tips include using staff surveys to identify differences, checking whether there are structural issues that discourage women from applying for high-earning jobs, introducing clear and fair processes for setting pay levels, advertising jobs as flexible and supporting managers to understand how roles can be performed more flexibly. 

The second publication helps companies develop an effective GPG action plan through a four-step process. The steps involve:

  • analysing GPG data and identifying actions that address specific underlying causes;
  • consulting and engaging with senior leaders (through working groups, surveys and informal feedback sessions) to achieve support for the action plan;
  • revising, assessing and embedding the action plan by setting targets, appointing a named individual to be in charge and being ready to adapt the plan as required; and
  • allowing enough time for the action plan to take place, so the employer can fully consider its approach as well as refine its plan to accurately reflect the issues driving its GPG.

With job candidates putting more pressure on companies to show they are championing diversity and gender equality, and with businesses facing the reality of skillset shortages, companies would do well to give these documents some attention. However, it is yet to be seen whether any meaningful action will be taken while the sanctions for inaccurate reporting and/or failure to report appear to have no teeth. 

While the 2018 GPG statistics were telling, it is the 2019 statistics that will prove whether companies are moving in the right direction. 

Helena Rozman is an associate at Dentons

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