Firms in the UK with 250 or more employees have submitted their gender pay gap numbers ahead of the April 4 deadline. More than 10,000 firms were expected to publish their figures on the government website. The figures submitted so far revealed that 78% of these companies favoured men more than women in their pay. 14% reported paying women more while 8% said there was no gender pay gap according to the median measure.
Gender pay gap describes the percentage difference between men and women average hourly earnings. According to the Office for National Statistics (ONS), as of April 2017 men earned 18.4% more than women. It is worthy of note that gender pay gap and equal pay are different. Equal pay states that any two persons doing the same job should earn the same regardless of their gender. Therefore, a company may be paying its male and female employees the same for similar roles but could still have a gender pay gap if it has more male in senior positions.
An analogue to understand the gender pay gap is to line up all the men and women working in a firm in two separate lines in order of their salaries. The difference in salary between the man in the middle of his line and the woman in the middle of hers is median pay gap.
According to the latest numbers, a majority of sectors favoured men over women with finance being the worst affected. In this sector, the average woman earns 35.6% less than the average man. Out of the 279 finance companies that have submitted only eight reported a gender pay gap that favoured women. The three sectors that reported paying women more than men included the water and waste management, household employers and mining.
During their submission, employers are given the option to add a narrative to their calculations. This would explain the reason for the gap and the effort taken to tackle this difference.
Ryanair was among the worst offenders reporting a 71.8% gender pay gap. Companies such as Starbucks, High Street Brands KFC, McDonald, and Primark were among the 8% that reported no gender gap in their pay. They have however been some criticism of the exercise, with some describing as a crude mechanism that can easily be misinterpreted.
The Fawcett Society has however counteracted these criticisms stating that the exercise presented c chance for employees to discuss what they earn in relation to what their colleagues earn. The Society’s chief executive described gender pay reporting as a game changer. According to her when women find out what their colleagues are earning, this puts them in a position to challenge any inequality.
Carolyn Fairbairn, CBI Director-General stated that gender pay reporting presented an opportunity for companies to bring about change. She, however, warned that companies will need to partner with the government if they were to bring about a long-lasting change.