The good news is that latest earning data published by the Office of National Statistics shows that overall, the gender pay gap is in moving in the right direction. Although we have had a hiatus on mandatory reporting for 2020, indications are that in April of this year the gap is continuing to close.
Amongst all employees, the gap has reduced to 15.5%, down from 17.4% in 2019. For full time -time employees the gap is reducing further to 7.4%, down from 9.0% last year, and remains close to zero for those aged under 40. Furthermore, even when considering the potential impact of furlough on pay and hours in April 2020, the ONS suggests that this is real movement in closing the gender pay.
But behind the headline figures, there is still subtlety to the differentials and it is reasonable to hypothesise that the downward trend may not continue in the same way as the impact of Covid-19 starts to bite on the labour market and employment in 2021.
Taking a deeper dive into data provides a more nuanced picture of the gender gap, and highlights where there are still some clear issues that still need to be addressed, and without a focus on these, progress to reducing the gap will remain painfully slow, if not stall completely. So, to really get to the crux of gender pay gaps, to understand the factors that contribute to differences, and to create action plans that can really make an impact, organisations also need further investigation and analysis on their gender pay calculations.
Type of roles
Some of the biggest pay gaps are in sectors and roles which are generally higher paid overall - for example in finance, law, IT roles and senior roles in educational institutions. The gaps in higher paid roles only exacerbate the overall pay gap.
• Do you have women in higher paid roles?
• Is there a bigger gap for women in your better paid roles?
• Do your career, training and development opportunities facilitate women to reach the better paid roles?
Age
The results from the ONS show that the pay gap is more than 10% for women ages 40 and over. Research has shown that women often face the double-whammy on their careers and earning potential, with responsibilities for dependent children and then for caring responsibilities for older relatives.
• How does age impact your gender pay gap?
• Is your well-being approach supporting employees with caring roles?
• Are family-friendly initiatives making a difference?
Ethnicity
Although there is no mandatory requirement yet to calculate ethnicity pay gaps, many organisations are already doing so, in line with a responsible reward approach and in anticipation for it to be compulsorily disclosed. With an additional lens of ethnicity, gender differentials can be compounded.
• Have you looked at BAME pay differentials?
• How does it compare for gender pay?
• Is there a difference between BAME women and non-BAME women?
At Innecto, we work with wide range of clients with regards to gender pay and BAME reporting. We help to lift the lid on what’s really leading to differences within an organisation and enable the development of tailored approaches that will make the most impact. In order to best serve our clients, we have extended our 2021 Gender Pay Reporting service to include running the figures for both 2020 and 2021, furlough analysis, and a dry run of ethnicity pay gap calculations. Our three levels of service, tailored to your current strategy and challenges, also provide you with the opportunity to not only meet the legal requirement, but to also identify the underlying reasons behind a gender pay gap and how to address them.
If you’d like to know more about our bespoke Gender Pay Reporting Package, you can download our Gender Pay Reporting guide here, or call us on +44 (0)20 3457 0894. Alternatively, I can be reached directly via email at judith.moore@innecto.com.
