Gender pay gap: What every woman should know

By Emma Thelwell
BBC News

image sourceGetty Images

New rules mean thousands of companies are being forced to come clean on the state of their gender pay gaps.

Some have already volunteered the information - with Schroders fund managers taking the plunge as the first FTSE100 company to go public.

The group revealed that fixed pay for its female staff was 33% lower on average than for their male staff, while there was a bonus gap of 66%.

It sounds like a bad start for #GenderPayGap, but Schroders said the figures "may be misleading".

In line with most companies in the financial services sector, there are fewer women in senior roles at the firm.

The company said: "Our analysis of comparable roles shows that we reward men and women fairly for similar work and that the gap reflects the lower representation of women at senior levels within the organisation".

If that's the case, what is the point of these figures? And how should you act on the facts?

Why is releasing gender pay data important?

The Chartered Management Institute (CMI) calls it "unprecedented transparency".

For the first time, more than 9,000 companies employing about 15m people will have to measure, and then report, how they pay men and women.

It will affect nearly half the workforce in the UK.

Unequal pay for men and women doing the same job has been illegal for 40 years but overall the gender gap in the UK still stands at 18%.

Ann Francke, chief executive of the CMI, says: "The answer lies in the fact that the gap, in most cases, is not the result of unequal pay.

"Instead, it reflects the failure to achieve a balance of men and women in senior management roles, or to attract and retain women in some of the better remunerated occupations".

What will the gender pay gap data tell you?

It won't compare your salary with someone else's. You are already entitled to compare your contract to that of another employee of the opposite sex who is doing similar work under the Equal Pay Act.

What it will show you is:

  • The difference in average earnings between men and women
  • The difference in average bonus payments between men and women
  • The proportion of men and women in each pay quartile
  • Whether a company complies with the regulation and how it compares to other companies

Although it is not obligatory, the government is encouraging companies to publish an "action plan" alongside their figures, demonstrating the steps they will take to close the gender pay gap within their organisation.

Emma Codd, managing partner for talent at Deloitte UK, said: "For the first time people will be able to see the gender pay gap of large employers at one fixed point in time, with this gap measured and reported in a consistent way.

"They will be able to read about the causes of each company's gap and the actions that are being taken to close it; they will also be able to determine for themselves those companies that are serious about this and those that are not."

Where can I find out about my company?

Any voluntary, private or public sector company with 250 or more workers has to publish its annual gender pay data from April 2017.

Companies must publish the data alongside a written statement on their website, as well as reporting the data to the government.

The government plans to publish a link to a portal with all the data on its campaign page.

Though there is no set date for each company to report the data, they must do so by April 2018.

What if a company fails to publish the data?

Any employer that fails to publish its gender pay data would be breaking the law. The Equality and Human Rights Commission has the power to enforce employers to comply with the regulations if they fail to do so.

If employees are concerned that their company is not complying or does not have an action plan, they should speak with their HR department.

If they or the HR department need further advice, they can check the guidance on the government's website or contact the conciliation service Acas for further help.

What if it's bad news?

Some industries are expecting the data to show them up.

The industry body for engineering and manufacturing, EEF, says its partners - which include Tata Steel and Rolls-Royce - are bracing themselves.

But they say it's not due to a lack of support for women in the industry.

"Far from it," EEF's skills policy advisor Verity O'Keefe, said.

"Manufacturers offer enhanced and competitive maternity pay and schemes, flexible working and structured career and training plans."

She said the problem was that "just a handful" of engineering apprentices and graduates are female.

"Until we are able to move the dial on female recruitment we are unlikely to see much movement on closing the gender pay gap," she added.

But not every industry will have the same excuse, and the government hopes the new rules will open up a dialogue between employers and employees about pay gaps, and encourage employers should to use the data to make changes.

The Women's Equality Party says women can use the new law to push an action plan or address an unconscious bias within their company.

Hannah Peaker, chief of staff at the campaign group, said it would be an "eye-opener" for women who, once they see that inequality exists in "every sector and at every level", will start to address the issue.

Minister for Women and Equalities, Justine Greening, said helping women reach their full potential "isn't only the right thing to do, it makes good economic sense and is good for British business".

Sam Smethers, chief executive at Fawcett Society, which campaigns for equality, says employers should see this as "an opportunity not a threat".

She said: "Through gender pay gap reporting they can address the productivity gap and get the best person for the job at the right level."

If companies don't act, women can use the data to find better opportunities - and vote with their feet.

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