Fri 03 May 2019

Gender Pay Gap Round 2 - has anything changed?

4 April 2019 saw the end of the second year of gender pay gap reporting for private and third sector organisations.

As with last year, many companies left it to the last minute to report on their gender pay gaps - one week before the deadline less than 4000 of the 10,000 plus companies required to report had done so, and reportedly 25% left it until the last 36 hours. 

So has much changed in the last 12 months? At first sight it appears not with less than half of the companies managing to narrow the pay gap. Indeed, for 45% of respondents the gap has widened.   

Although 14% of companies reported a pay gap in favour of women, when looked at on a sector by sector basis men were paid more on average in every one.  Construction had the highest gap, followed by Finance and Insurance, with the health sector and accommodation and food having the smallest gap.  The overall picture did show an improvement , albeit only a small one, with the median gender pay gap between men and women reducing from 9.7% last year to 9.6% this year.   And it is certainly not all doom and gloom given that the other, less reported, side of the coin is that 48% of companies have manged to reduce their gender pay gap (with 7% showing no change).    

There is always going to be continuing scepticism about the accuracy of some of the results and how much creative accounting has gone into producing them.  In this regard the Royal Statistical Society has produced  10 proposed reforms to the reporting system that they believe, if adopted, would refine the system in future.  These include using pounds and pence rather than percentages so the figures are more easily understandable and a revision of the Government guidance on how to calculate the median rates.  They also explain how the system can be "gamed" by companies ensuring that the median man and median woman are paid the same, but those above and below the median could have a pay differential.  The Society recommends requiring medians to be reported within each income quartile which would make it more difficult for employers to present information in a misleadingly favourable light.   There does seem to be a lot of sense in these recommendations.  

The snapshot day for the 2019/2020 reporting year was 5 April - probably (??) the last snapshot date before Brexit.  If, as many seem to anticipate, an economic slump follows the UK's departure from the EU, will employers focus move from equality to simple survival?  Whilst things are moving in the right direction, it seems likely that there is still a long way to go.

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