The Gender Pay Gap is Bunkum

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This is an accompanying blog to go along with my recent online Recruiter Zone show.

 

If you have been absorbing the headlines from the mainstream media in the past 2 weeks, you’d be forgiven for thinking that it is commonplace for employers of all types (not just the BBC) to systematically pay women around 18% less than they pay men for the same job. That they have noticed women will accept less, and are taking full advantage of that in either hiring new staff, or raising the salaries of existing male colleagues. You’d be wrong, but that just gets in the way of a good headline.

Now the issue is a very real one, and like any real-life issue is much more complex and nuanced than you might think. Simply stating that on average women in the UK earn 82% of the salary paid to men just doesn’t cut it.

Here are some real-life statistics.

  • In April 2016 the gender pay gap (for median earnings) for full-time employees was 9.4%.
  • When part-time employees are included, the gap decreased from 19.3 per cent in 2015 to 18.1 per cent in 2016, the largest year-on-year drop since 2010. In 1997 the gap for all employees was 27.5 per cent.
  • For part-time employees separately, women are paid more on average, resulting in a “negative” gender pay gap of minus 6%. That’s right, for staff working between 10-30 hours per week, women earn (on average) more than men. But that in itself gives a skewed view of the stats.
  • The composition of the male and female employee workforces are quite different, with more women working part-time than men (41 per cent and 12 per cent respectively). Because the hourly earnings of part-time employees tend to be less, on average, than the earnings of full-time employees, women are more likely to receive lower hourly rates of pay. This helps explain why the gender pay gap for all full-time and part-time employees is greater than the gender pay gap for full-time employees only.
  • Investigating the difference in the gender pay gap between part-time and full-time employees by the number of paid hours worked shows that typically, more men are employed in jobs that involve working a higher number of hours, and for these jobs, it can be seen that the gender pay gap is in favour of men.
  • For high earners (top decile), the gap for full-time employees has remained largely consistent, fluctuating around approximately 20 per cent (18.8 per cent in 2016).
  • For low earners (bottom decile) the gap has narrowed over the long term, to 4.9 per cent in April 2016, the largest year-on-year decrease in the full-time gender pay gap for the bottom decile since records began in 1997. This is likely to be connected to the introduction of the National Living Wage, as women tend to work in lower paid occupations. For example, the lowest paid occupation group – caring, leisure and other service occupations – has a higher proportion of women working full-time. (78 per cent).
  • The gender pay gap for full-time employees in the private sector decreased from 17.4 per cent in 2015 to 16.6 per cent in 2016, the lowest since the series began in 1997, continuing the long-term downward trend. The gender pay gap in the public sector has also decreased from 11.8 per cent to 11.3 per cent, continuing its longer-term trend of fluctuating around 10 to 12 per cent since 2003.
  • When looking at the differences for full-time employees, the gap is relatively small up to and including those aged 30 to 39. From 40 to 49 and upwards, the gap is much wider, with men being paid substantially more on average than women.
  • The gender pay gap also varies by occupation and ranges ranging from 3.9 per cent for sales (a decrease) and customer service, to 25.1 per cent (an increase) for skilled trades occupations in April 2015.

In no way could you say that the problem is solved, but we are beginning to see real progress, and perhaps now is a good time to accelerate this. For my part, I would be keen to see some or all of the following measures deployed by small and large, public and private sector organisations.

  1. It would prove very messy to simply increase a large number of women’s salaries, or to decrease men’s, so harmonising of earnings must be done in a controlled logical fashion over time.
  2. All measures must be communicated with the wider workforce in an easily explained way. The process should be as transparent as possible, with the end goal clear for all.
  3. Truth and reconciliation. Many local authorities delayed even admitting there was a problem because they knew there would be a significant penalty when they did. The price of back pay has actually prevented them from doing the right thing sooner. Forgiveness of past inequality should help real fairness be implemented much sooner.
  4. As much as is possible, organisations should offer transparency on salary levels, and staff can work within recognised bands.
  5. Employers need to recognise that a policy of hiring staff for the lowest possible salary inevitably leads to inequality, which of course disrupts the workforce. Pay for the value of the job, and not according to the salary a new hire was earning before (which would simply perpetuate previous inequalities)
  6. Wherever possible, instill equality of opportunity, both at the hiring stage of new trainees, and right through the organisation to the boardroom.

This is by no means an exhaustive list, but I believe could be a great start. Perhaps more seasoned HR professionals would think me naïve, but I believe we are all entitled to an opinion on this.