Gender pay gap: What the figures really tell us
The data required by the new regulations should be the starting point for change, writes Sarah Winship
The new obligation for qualifying firms to report their gender pay gap has been hailed as a significant milestone for diversity and inclusion. While the new regulations have been widely welcomed as a step in the right direction to addressing inequality in the workplace, it is important we look beyond what the figures we are required to publish tell us.
According to the Office for National Statistics, in 2015 the UK’s median gender pay gap for all employees – including part-time – was 18.1 per cent. Women, on average, earned around 18.1 per cent less than men. This gives us a useful reference point, against which we can benchmark our own figures, but it doesn’t help us identify causes of the gap. It does not tell us whether there are differences in how men and women are paid for comparable jobs, nor does it show how the figure may be affected by occupational segregation.
Headline figures have the potential to create considerable reputational risk if a firm is shown to have a larger than average pay gap and no doubt league tables will be created within sectors. For this reason, it is important for businesses to reflect on what factors influence the gap within their own organisations and what they can do to address this.
There are a number of reasons why firms might have a pay gap. Across the UK economy as a whole, men tend to hold higher paid, senior positions, with women more likely to be in lower paid jobs. Law, as an industry, is no different. Despite the fact there are more women entering the profession than men, they are woefully underrepresented at partner level. Add to this the fact that more junior administrative roles tend to attract women, we then start to see how occupational segregation can have a significant impact. Women are also more likely to work in part-time roles which tend to be lower paid and offer fewer opportunities for promotion.
Flexible working has become popular with companies trying to attract the best talent by offering a better work/life balance. Gendered patterns of uptake of such schemes can also impact on the pay gap. Historical and social norms have resulted in unequal caring responsibilities between the genders, with women playing a greater role in caring for children and for sick or elderly relatives. They are more likely to take career breaks or use flexible working policies to undertake such responsibilities. In industries that prioritise long working hours, this places them at a disadvantage.
For many, this is nothing new. Law firms that have been working to advance diversity and inclusion have been tackling these issues for some time. In this respect the information we are required to publish doesn’t tell us much, it simply gives us headline figures for the whole workforce that do not illustrate the complexities of the pay gap. What it does provide, however, is an evidence base for initiatives to address inequalities faced by women, and a catalyst for change.
The data required by the regulations should be the starting point for change. At Shoosmiths we have a Gender Equality Working Group. Membership of the group is representative of the organisation and includes our chief executive, Claire Rowe. It provides a sounding board to discuss issues and potential solutions. Likewise, the board brings ideas to the group to collaboratively pin down the steps to be taken, giving our employees direct input and influence on decisions that will affect them.
The group looks at a suite of diversity data that spans the whole employee lifecycle. This includes gender pay gap information, but we look at it in a more granular way, taking account of role, location, and practice group. This helps us understand what is contributing to the overall gap, and to develop informed actions across the business that will address the core problems that lead to it.
The numbers themselves may tell some of us what we already know, but the regulations shine a spotlight on the issue and provide an opportunity for us to really start talking about it and understand what is creating the gap. It is a move in the right direction that provides some transparency – transparency we have never had before, particularly in the private sector.
Sarah Winship is diversity, inclusion and wellbeing manager at Shoosmiths