Reporting of gender pay gaps is off to a slow start and there's not long left to fix it

Just 4 per cent of companies have published their figures. The rest have until April, but Hazel Sheffield fears the results are only an indicator of inequality, not a catalyst for change

The under-representation of women in senior roles is the main cause of the imbalance (AFP/Getty )

Of the 9,000 businesses that the Government is expecting to report on the gender pay gap by 6 April 2018, fewer than 400 have so far published their figures: just 4 per cent.

The requirement, which was introduced in April 2017, is intended to provide transparency on gendered pay. It will measure the effectiveness of attempts to reduce the gap from its current 9.1 per cent (down from 9.4 per cent in 2016).

This means women are still being paid on average 9.1 per cent less than men. While this is the lowest gap since the survey began in 1997, when the gender pay gap was 17.4 per cent, there have only been minor improvements in recent years.

David Cameron committed to eliminating the gap “within a generation” in 2015, but the reporting requirement may be considered the first meaningful attempt to do this. Yet it is not without its flaws.

Companies are worried that current and potential employees will see the gender pay gap as evidence that women are being paid unequally, according to the consulting firm Mercer, which has been working with firms to help them comply.

The metric used by the Government does not measure unequal pay – or what men and women at the same level are paid – but it is more likely to point to lower progression of women throughout a company or companies with fewer women in higher paid specialist roles.

“The clients I work with have accepted the frustration of the metrics, in terms of them bringing together a whole number of elements that has the potential to confuse,” says Chris Charman, principal at Mercer.

“But many organisations are using it in a positive way, recognising that it is stirring up a discussion about what they are doing in talent and promotion and checking their pay programmes.”

The median gender pay gap for the few companies that have reported so far is 5.8 per cent, much lower than the national average, which is perhaps why they are the first ones to report. Over 60 per cent have chosen to publish a narrative alongside the figures – an option in the reporting requirement that allows a company room to explain their figures and set out plans for improvement.

They include Fujitsu, an IT company, which has declared that its mean hourly rate for women is on average 16.7 per cent lower than for men. That’s better than the average pay gap for the tech sector, which stands at 25 per cent.

But not good enough for Duncan Tait, head of Europe and the Americas for Fujitsu, who sets out in the statement accompanying the results plans to improve the gender pay gap as part of a broader strategy on diversity.

Part of the problem for Fujitsu is attracting female candidates, when less than 16 per cent of IT graduates in 2016 were women. “The under-representation of women in senior management roles and in more highly paid areas, especially technical and sales roles, is the main factor causing our gender pay gap,” Fujitsu says.

“To remedy this, we need to attract more girls into STEM subjects, build a robust talent pipeline, celebrate our female role models, and provide stronger management support to enable women to succeed.”

That responsibility cannot fall to the employer alone, according to Charman. “There are many things the Government isn’t doing. The main one is creating long-term role models for boys and girls and positive examples of the work women and men do.”

Another is providing parity for parental leave. Since 2015, mothers can “give” some of their leave to the father of their child, but many employers have yet to update their maternity policies to include fathers. “They have parity for leave but fiscally they can’t access it,” Charman says.

A year after the policy was introduced, research of 200 employers by benefits company My Family Care showed that four out of 10 had not had a single male employee exercise their right.

That is having a knock-on effect down the line as many women who take time off to parent never catch up with the pay of their male counterparts. A government inquiry held last year into the gender pay gap found that women over 40 are most likely to be affected, with working women between the ages of 50 and 59 facing a gap of 27 per cent. The inquiry said that unless action is taken to address the root causes of this inequality, women over the age of 40 will continue to suffer limited access to well-paid work.

One of the highest gaps reported so far comes from easyJet, with a mean pay gap of 52 per cent. That has something to do with the peculiarities of the aviation industry, where men are more likely to be pilots and women are more likely to be cabin crew.

Charles Cotton, senior performance and rewards adviser at the Chartered Institute of Personnel and Development, says: “A lot of the focus is about how we can get more women into these roles, but it could also be about how to get more men into roles like cabin crew, or why companies aren’t attracting more women to be pilots.”

In general, Charman says, the results for bigger companies are more positive than those for smaller ones that may not have the time or resources to report the figures properly or accurately.

The veracity of some of the results have already been called into question after 16 submissions recorded no gender pay gap at all.

Employment lawyers may be anticipating an increase in the number of tribunals from staff once the results come in. But greater risk may come from dissatisfaction among employees in the workplace, risking productivity when it is already at historically low levels. This is doubly risky for employers and the Government.

The deadline comes as companies focus their attention on retaining skilled workers after the UK’s withdrawal from the European Union.

“Brexit may negatively affect diversity,” Charman says. “I fear with all the other things going on with the economy, it might fall off the boat.”