Gender pay gap reporting doesn’t add up

 

On the 4th April, companies with over 250 employees were required, by law, to report on their gender pay gap. 

10,326 companies submitted data on their gender pay gaps. Out of that number half of the firms reported in the final week and more than 1,500 companies reported in the last 24 hours before the deadline. There were also 1,557 firms who failed to submit and who are being investigated by the Equality and Human Rights Commission. Yet there were also 265 firms who filed voluntarily (companies with fewer than 250 employees).

Over the year, we’ve covered the well-meaning, yet questionable gender pay gap reporting debate, quite a bit. In short, we’ve always been advocates of equal pay for equal work. As far as we’re concerned, that’s the real debate. Yet sadly, whilst gender pay gap reporting has strived to highlight important issues around gender disparity, it falls short. And, as the Institute of Economic Affairs points out so well, here’s why.

Firstly, there’s no distinction between full and part-time workers (as women are significantly more likely to work part-time, this skews the results towards men). Secondly, there’s no like for like comparisons. The type of job, background, years’ experience is not reflected anywhere in the reporting – all of which help determine pay. There’s also missing data, with the ‘total hours worked’ being omitted from bonus calculations making it impossible to see if any differentiations are based on gender discrimination or number of hours worked (without additional information on annual salary, it is also impossible to calculate the percentage of the salary the bonus accounts for).

Equally, without a breakdown of age in each area, it also makes it impossible to say if a disparity is caused by sex discrimination or other factors (e.g. recruiting young female graduates into junior roles). And when the data that is published is done so as standalone statistics, it’s difficult to reveal anything meaningful about differentials in pay for men and women doing comparable work.

If you’ve got five minutes, take a look at the results for yourself and see just how scant the information is that’s provided.

Given that the reporting measures are so rife with uncertainties, is there any point reviewing the data? Perhaps not, but we’d be equally wrong in ignoring it in its entirety too. So, what are the headlines? Thanks to BBC News, we can give those to you.

Of the 10,000 (give or take a few) large companies that provided their gender pay gap, ¾ of them are paying their men more than women. Based on the median pay gap, 14% of firms reported a pay gap in favour of women. 8% reported no pay gap at all.

Men take the top spots when it comes to the higher-paid jobs, with just 1 in 3 firms having a majority of women among their top earners. Men are also paid higher bonuses than women (the biggest difference was in the finance sector, which pays women 35% less than men).

There is also no sector that pays women more. Not one. With construction leading the way with a median hourly pay gap of around 25%.

And whilst on paper this all looks wildly unfair, in reality it doesn’t mean much (for all the reasons we’ve already explored above). Has it all been a waste of time? It depends on its intention. If its aim was to raise further debate around gender inequality in the workplace and to spark further research, perhaps it will achieve its goal. Yet the real debate around pay gap is whether pay gaps exist between men and women for equal work. Sadly, the report doesn’t answer this. And if there was ever a question as to why this is what we should be tackling, as opposed to filling out meaningless data, take a look at the below.

Thursday, 12 April 2018

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Tony McPartlin Date: Apr 12, 2018

Whilst I agree that the required reporting doesn't tell the full story and falls some way short in what I'd hope an exercise like this should have achieved, I also think that it does highlight some obvious questions. How do we increase the number of women in higher paid jobs? How do we inspire more women to take up traditionally male roles such as the much publicised pilots at many airlines with huge gender pay gaps?

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Gender pay gap reporting doesn’t add up