Gender pay gap reporting: UK in last place

As anyone who has ever owned a fitbit will know, monitoring a problem and actually solving it are two very different things.

A new report, published by the Global Institute for Women’s Leadership at King’s College London and The Fawcett Society, shows the same is true for gender pay gap reporting. Measured against five other countries – Australia, France, Spain, Sweden and South Africa – the strength of the UK’s system ranks in joint-last place.

Since 2017, UK companies with 250 or more employees have been required to collect and publish their own vital signs for pay equality. The results are clear: 9 out of 10 women are working for a company that pays its female workforce less than its male workforce.

The reasons for this disparity are numerous: in addition to being paid less for comparable roles, women are underrepresented in more senior and lucrative roles, and overrepresented in roles attracting lower salaries. Interestingly, there is no meaningful disparity between men and women under 40, suggesting the difference may really be a childcare penalty.

So we know there is a problem. By forcing companies to admit it, the government hopes companies will be shamed into solving it themselves. That may be the case for some – I know of at least one woman who received an unexplained salary raise right around the first reporting date. But for others, the pay gap is so prevalent that it is hardly embarrassing to admit they’ve got the same problem as everyone else.

The gap is closing, but at a glacial pace. For instance, an analysis of 10 large banks reporting early found an average difference of 44.5% between male and female wages, compared with 45.2% reported the previous year.

Other countries do it differently. In France, employers are required to close any gap within three years or face a heavy penalty. In many places, the threshold for reporting is much lower, at 50 employees, meaning a significantly larger percentage of the workforce is covered.

The gender pay gap is not simply a matter of paying all employees the same for the same job. It has to do with looking at all aspects of the workforce. Are performance reviews objective and free of unconscious bias? Do employees with children have the same access to networking and promotion opportunities? Are male and female employees equally favoured for mentorship?

These are difficult questions, which often have more to do with the value society at large places on certain kinds of work than the rights or wrongs of individual employers.

So, identifying the pay gap is just the first step. Now we know there is a problem, it is time to take real action.

This blog was prepared by Kendal Youngblood, Solicitor – didlaw.