Gender Pay Gap reporting is relatively new; therefore, most businesses are struggling to improve their data. In order to improve this data, you first need to understand the definition of Gender Pay Gap, how this differs from Equal Pay and what it measures.
The gender pay gap is the difference between the gross hourly earnings for all men and the gross hourly earnings for all women. This often gets confused with equal pay. According to Mercer, the gender pay gap is the difference between what men typically earn in an organisation compared to what women earn, irrespective of their role or seniority. Most importantly, equal pay is the legal requirement for men and women to be paid the same for performing the same work that has been rated of equal value.
What is the Gender Pay Gap data telling us?
Although the Office of National Statistics have reported a Gender Pay Gap decrease from the previous year, the larger businesses are not performing well according to the BBC. In addition, the BBC previously reported on how the millennials are leading the charge with regards to bridging the Gender Pay Gap. See the below graph.
It is evident from the statistic above that the GPG will steadily decrease over time as the millennials climb the corporate ladder. In our opinion, businesses are trying to force the data to improve and not allowing time to run its course. Moreover, larger firms will struggle to improve their GPG reports as they employ more people. However, larger businesses can create and implement a long-term strategy on improving their numbers.
There is one complication however, and that is part time workers. Part time work is mostly dominated by women as indicated in figure 1 of this article by the Office for National Statistics. Naturally, part time workers are often paid less than full time employees, due to a pro-rata salary, which will negatively affect your Gender Pay Gap report. Therefore, allowing employees to work from home but be employed full time rather than on a part time basis is a more logical solution. Not only will this increase your GPG report, but it will also promote a healthy work life balance. Alternatively, you could increase the pay of your part time employees however this would then create an imbalance when comparing full-time equivalent salaries.
In conclusion, you will need to create a Gender Pay Gap action plan in order to improve your data. Above all, businesses need to focus on employing more women at the same salary rate as males for the same role. In addition, businesses need to be more flexible and should consider allowing employees to work from home on a full time basis rather than part time. Contact us for more information.