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Gender pay gap: Year-two figures reveal slow progress

Fewer than half of the UK's biggest employers have succeeded in narrowing their gender pay gap

There was negligible progress on closing the gap between 2017 and 2018. Overall the median pay gap in favour of men lowered slightly by 0.1% from 9.7% last year to 9.6% this year.

Across 45% of firms the discrepancy in pay increased in favour of men, while at a further 7% there was no change. Overall, 78% of companies had a pay gap in favour of men, 14% favoured women, and the rest (8%) reported no difference.

More than 10,000 employers submitted details of their pay gap at midnight on Thursday 4 April. It was unclear exactly how many companies had not reported, although it is thought about a quarter did so in the past 36 hours.

The highest median gender pay gap was revealed to exist in construction at 24.35%. This was followed by finance and insurance, with an average gap of 22.9%. This equates to a woman earning 77p for every £1 paid to a man. Average bonus pay in the financial sector also reflected a stark gap at 40%.

Some airlines also posted large gaps, including easyJet where the gap rose to 47.9% and Tui Airways at 42.5%. Ryanair reported a gap of 64.4%, down from a 71.8% gap in 2017. Several fashion brands also filed large gaps, including women’s clothing brand Sweaty Betty which reported a 66.6% pay gap.

The public sector also failed to narrow its gender pay gap this year, with these figures reported by midnight 30 March. Women are still paid an average of 86p for every pound paid to men, the figures revealed. Almost nine in 10 (88.5%) public sector organisations reported a median pay gap in favour of men, with more than a third paying men 20% more than women.

This year organisations were also asked to provide action plans on what they are doing to improve their gender pay gaps. Last year the Equality and Human Rights Commission called for targets and action plans to be mandatory.

Speaking to HR magazine Charles Cotton, senior rewards advisor at the CIPD, said that it was disappointing more organisations had not committed to an action plan: "If the government brings this in and action plans are made mandatory there's a risk that this could just become a box-ticking exercise. We would really prefer for organisations to want to do this voluntarily, and HR have an opportunity here to start showing the benefits of this. If you are transparent about your plans on improving pay gaps on gender, as well as ethnicity and disability, you'll be more attractive to investors."

Cotton recognised that compiling the data could be a difficult process without the right tools: "It's vital for HR to invest in the right payroll systems and technology to make sure that analysis can be carried out as smoothly as possible."

Heather DeLand, executive creative director at TMP Worldwide, told HR magazine that the lack of progress is not surprising. “We haven’t seen much progress in the year since we started reporting on the gender pay gap, but that’s not at all surprising. The kind of change we need takes more than a year. And it takes more than a half-hearted mentoring programme or a few posts on the company social feed on International Women’s Day,” she said.

DeLand added that the biases show that: "We are dealing with deep societal issues, with baked-in biases carried by all of us. By the time we’re of an age to be employed we have embedded behaviours that perpetuate inequality. Pay gap reporting is one thing – a blunt instrument – that forces us to have a conversation. So it’s useful but it’s not the total picture, and it doesn’t give us answers or solutions.

“To work towards equality we need greater action at work: nurturing female talent into leadership, greater diversity of all kinds at all levels, celebrating a broader range of role models, more flexible options for work, and better policies to encourage men to take time as fathers."

Helen Letchfield, co-founder of Parent and Professional, commented that sluggish progress on maternity rights is a factor behind the gap: “It’s simply unacceptable that hundreds of firms have seen their pay gaps increase when there are numerous things they could be doing to address the problem," she said. "Critical to reducing the gender pay gap is addressing the barriers to career progression – collectively referred to as the ‘motherhood penalty’ – such as flexibility stigma, which assumes those working part time or from home are somehow less committed or capable."

Letchfield recommended that organisations invest in training to tackle stigma for new parents: "By training managers on how to manage flexible workers and coaching maternity returners to have a properly-informed conversation with their manager about the importance of measuring their success according to outcomes, rather than hours worked, forward-thinking employers are eliminating some of the negative perceptions that cause a quarter of flexile workers to say they’ve been overlooked for promotion.

"Only by making parent-friendly practices the norm can employers address discrimination against parents and eliminate the unproductive ’seen to be there’ cultures that are driving gender pay gaps.”

The three companies with the biggest gaps were found to be Countrywide Services at 60.6% (down from 63.4% last year), Independent Vetcare at 48.3% (50.5% last year) and easyJet at 47.9% (45.5% in 2018).