Deadline reveals mixed picture for gender pay gaps

Almost 10,500 of the UK’s largest employers filed their gender pay gap data for 2018-19 as the reporting deadline passed yesterday. CIPD analysis shows a slight increase in the headline figure.

Early analysis by the CIPD, the professional body for HR and people development, found the:
  • headline median (middle value) figure has slightly worsened – rising from 9.2% to 9.6%
  • difference mean (average) figure has slightly improved to 13.1% from 13.4%
  • proportion of organisations paying women less than men has risen from 77.10% to 77.79%.

Latest data looks to the future?

Commenting on the data, Peter Cheese, chief executive of the CIPD, echoed sentiments of other business organisations in suggesting the increase could be a positive sign. “Some of this may be from businesses initially focused on bringing more women into entry-levels roles in order to build a pipeline of female talent,” he said. “This is a genuine commitment to lasting change and we must welcome these efforts even if it does mean the numbers do initially go up instead of down.”Earlier this year, the government issued new guidance for companies on how to reduce the gender pay gap and introduce flexible working more widely. It is also working closely with businesses to address the multi-faceted issue through action and legislation. Relocate Global is exploring global mobility’s role in closing companies’ gender pay gaps and the obstacles women face as organisations seek to balance for better and deliver the benefits of more equal workplaces.

Find out more about Relocate Global's Think Women community, and the research, experience and action behind it:

Increasing transparency around action to close the gaps

To understand the context of the data and to focus to balance men and women’s pay, Mr Cheese urged more employers reporting their gender pay gaps to include narrative around the data’s implications and to increase transparency around activities aimed at reducing their gender pay gap.“It’s disappointing that many employers are still not providing a narrative or action plan,” said Mr Cheese. “Organisations that simply provide their numbers are failing to meet the increasing appetite and expectation for transparency amongst all stakeholders, including employees, investors, and regulators.“Financial figures would never be given without any explanation for them, and gender pay gap reporting should be no different. As we head into the third year of gender pay gap reporting we need to see more of how organisations are responding and the actions they are taking." 

Widening gaps "no surprise"

For now, the challenge for HR and employers is to act on the data to hand. Rachel Mapleston, legislation expert at MHR, an HR, payroll and analytics software and services provider, agreed that narratives are important and added we should not be shocked by the latest data. “The widening discrepancy in gender pay although alarming does not come as a great surprise. With this year’s reporting deadline based on snapshot dates of 31st March and 5th April 2018, employers that didn’t take the time to evaluate their results and start to implement changes were never going to see much of a difference.“Employers who identified a gap but chose not to act on this information may well be seen in a less favourable light than those with initially bigger pay gaps who have demonstrated they are working towards reducing them.“As part of their inaugural report last year employers were asked to include a supporting narrative, outlining why their gap exists together with their plans to address it. If organisations have started to act on this then hopefully we will start to see the gaps narrowing in 2020, however this has been an issue since legislation was introduced in the 1970s, so it will likely take many more years to resolve.”

Where are gender pay gaps closing?

While the headline figure suggests the raw gender pay gap has slightly widened in the past 12 months, further analysis by the CIPD highlights areas where more progress is being made.For example, there has been a slight increase in the average proportion of women in each wage quartile, with particular movement in the upper middle and upper pay quartiles which typically have a greater proportion of men.  It also shows that the UK’s largest organisations (20,000 or more employees) have the lowest median gender pay gap at 7.6%.Regionally, women working outside of London are more likely to have a lower gender pay gap, with the gap lowest in Scotland, suggesting a North/South divide. The median is lowest in Scotland at 5.7% The South-East and South-West are the highest, both standing at 11% median hourly gaps. London’s gap is 10.4%.

Where are gender pay gaps highest?

Low female representation in certain industries is also a key factor in gender pay gaps, which again the latest data emphasises. The highest median gender pay gap exists in Construction (24.35%) followed by Finance (23.9%).Some industries, such as hospitality, have very low gender pay gaps (a median of 0.6%) potentially because of the high proportion of both men and women on the minimum wage.

Where are gender pay gaps lowest?

Neil Pattison, director at UK hospitality jobs board further attributed the sector's positive performance to employers valuing their workforce. He called on them to make "one last push" to close the good for good.“We welcome the new figures released today revealing that the accommodation and food service industry has the lowest gender pay gap of any sector; for every pound earned by the average man, the average woman earns 99p. It is also encouraging to see that in the last year the average gender pay gap in the sector has decreased and that it’s one of the few industries to achieve this."The figures highlight the genuinely positive focus of hospitality industry employers in valuing their workforces and developing them well and fairly. This runs across all areas including career opportunities and working environments."Whilst there is still a last push needed to eradicate the gender pay gap entirely, it is great to see that the sector is taking steps in the right direction and is leading the way for other industries to do the same.”

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