Post Gap Analysis

What do the World Cup and gender pay gap reporting have in common?

The nation awaited both with baited breath? Experts feared disappointing performances from our country’s biggest players? Gary Lineker is on hand for expert insight and incisive commentary? Okay, that one not so much. But what is true is that both events have generated an overwhelming mass of statistics and headlines, which you may not know what to do with. So perhaps the time has come for some ‘post-gap’ analysis?

The gender pay gap reporting deadline passed on 5 April this year for private employers (the public sector reported on 30 March). As predicted, overall there is a sizeable gap in favour of men.

Of the 10,015 companies that reported, 78% had a pay gap in favour of men. The median pay gap among those companies was 9.7%. The remaining employers either had no median gender pay gap (8%) or had one in favour of women (14%). A lot of the big players did fare badly, resulting in negative headlines for the BBC, Apple and Ryanair, to name just three.

As a thematic aside, football clubs topped the table of gender pay gap miscreants – with men being paid 83.42% more than women. This is hardly surprising with Premier League clubs paying out a mega £180k a week to some of its male stars. To really bring this football stat home, check out the BBC’s comparison calculator to see how long a footballer takes to earn your annual salary (be warned, it takes Cristiano Ronaldo 8 minutes to earn the average salary for a female graduate in the UK (£30k)). Anyway, I digress.

When analysing your gender pay gap statistics, it is important to remember that they may not tell you (or your employees) a great deal about unequal pay – which is unlawful under UK law. The gender pay gap looks at the gross hourly rates paid to all employees and does not compare like-for-like – hence why football clubs performed so badly. See here for an easy-to-understand summary of what the gender pay gap measures.

Unequal pay may well be one of the problems you need to address, however, broadly speaking the causes of the gap appear to be multi-faceted, structural and cultural, with many organisations attributing their gap to fewer women in senior roles and more women working part-time.

If your figures reveal a pay gap, and especially if your 2018/19 figures (which have already been set, as at 30 March / 5 April this year) show no change, or indeed a worse gap, what should you do now?

You should involve all necessary stakeholders to put together short, medium and long-term plans to reduce the gap. There are no easy solutions here, and clearly what needs to be done will depend on your organisation and the reason for any gaps.
Here are some top tips and tactics you might consider when devising your strategy.

1. Senior buy-in. Ensure that you have support from the top down from the outset. This is fundamental to ensure plans you put in place have longevity and represent a cultural shift towards modern working practices.

2. Holistic approach. Look at your organisation ‘in the round’ when identifying causes, starting with recruitment practices through to work culture, career development opportunities and the composition of your senior leadership teams.

3. Complementary steps. When choosing your changes, ensure a joined-up and coherent approach. For example, if you propose to ban all male shortlists for all jobs in your organisation – which PwC announced this month – also think about the wording and distribution of your job adverts so you are reaching and encouraging lots of women to apply.

4. Family matters. Think carefully about maternity/paternity leave and all the ways to help employees balance work and family life. Commentators continue to stress that the main factor stalling women’s career progression is the fact they still do the heavy-lifting when it comes to child-care.

• Could you do more to encourage men to take time off when they become fathers? A study in Sweden showed that for every month dad took for parental leave, mum’s future earnings increased by 7%.
  
  
• Provide support for maternity returners. PwC have a “returnship” programme which offers paid work experience for employees who have had a long period of absence from work. Mentoring and women-focussed networking events and initiatives could help too. What about on-site childcare facilities?
  
  
• Look at your flexible and part-time working arrangements and consult with those that use it – does it work, could it be improved, is the offer consistent from junior levels to the most senior jobs? The traditional view of many organisations is that senior positions can only be performed full-time from the workplace.

These are just some ideas and there are many more out there from sub-conscious bias training and salary reviews to thinking about whether your networking events could better accommodate female employees.
Resurrecting my (slightly dubious) football analogy perhaps you could say that closing the gender pay gap in your organisation is like re-building an English football team that can win World Cups (come on England!). You need to sow the seeds from the start and be in for the long-run, work hard to invest in and retain talent, have inspirational leadership and consider setting up on-site crèche facilities – okay, I told you the analogy was dubious.

If you require further information please contact Sophia Coles, or your usual contact at the firm on +44 (0)20 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, June 2018