Have your say on the gender pay gap

27 August 2015 -

With the Government consultation on the transparency of gender pay publications closing soon, Insights looks at what is already being done to help close the gender pay gap

Jermaine Haughton

There are just 10 days left to have your say on the Government’s proposals for greater transparency in the publication of gender pay differences, with the consultation closing on 6 September.

The close to the consultation comes shortly after the publication of research from CMI and XpertHR revealing that the national gender pay gap stands at 22% and only 29% of director-level roles are filled by women.

Minister for Women, Equalities and Family Justice Caroline Dinenage said: "We have more women in work than ever before, 25% of boards are now made of women and the gender pay gap is the lowest on record - and whilst I am proud of the progress made, we must go much further.

"This is why we will be requiring companies with 250 or more employees to publish their gender pay gap, to ensure the economy fully benefits from women's talents and fairly rewards them.

"I would encourage all companies to have their say on the consultation to help us eliminate the gender pay gap in a generation."

But in advance of the mandatory disclosure of gender pay information, Deloitte has this week voluntarily revealed the extent of its pay gap.

The Big Four accounting firm admitted  its female staff earn 17.8% less than male employees, but that this disparity narrows to 1.5% for men and women in the same grade of job.

The move follows PwC’s 2014 report showing that its gender pay gap was 15.1%, shrinking to 2.5% when adjusted for different job grades and locations.

The publication of the figures is a bold move from the two Big Four accountancies as they pre-empt the introduction of new legislation in 2016 that will require companies with more than 250 employees to publicly report gender pay.

Women on the rise

Deloitte’s pay audit also found that women are more likely to fill junior positions than senior roles. As these roles command higher salaries, the gender pay gap is exacerbated.

The other Big Four firms – PwC, EY and KPMG – have all been vocal in their effort to combat the problem of female career progression and promote more women into the upper echelons of their businesses.

Deloitte chief executive and senior partner David Sproul said his firm was focused on making the move to having more women in executive and other senior positions.

“The issue is far less about how we pay our people and more about the number of women employed at senior grades,” he said. “We believe that without a representative share of senior female employees average pay will never truly equalise. This is something we are working very hard to resolve.”

So far during 2015, nearly a third of the newly promoted partners at Deloitte and EY were women, while 23% of new PwC partners were female.

The commitment to reveal employee salaries and fight the gender pay gap isn’t just restricted to accountancy firms. Tech companies such as Pinterest and GoDaddy have also introduced a review of employee compensation data, with the latter vowing to ensure “equal work receives equal pay.”

And in April, Salesforce chief executive Marc Benioff announced that his company will publicly audit the salaries of all its 16,000 employees to make sure “women are treated 100% equally at Salesforce in pay, opportunity and advancement.”

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Read the CMI's eight ways to close the gender pay gap

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But more women in senior positions will not on its own solve the problem.

The CMI research also found that while men in director roles earned £138,699 on average, their female equivalents took home just £123,756.

Mark Crail, content director of XpertHR, said: “An entire generation has now worked its way through from school leaver to retirement since the first equal pay legislation came into effect in 1970, yet the gender pay gap persists. Many employers still prefer not to know just how bad it is in their organisation rather than getting to grips with the data and doing something about it.”

Are pay audits the solution?

Some experts argue that pay audits are of limited use in addressing the issue.

Besides the extra paperwork, the new requirement to publish gender pay differences could be skewed by very high salaries of particular key staff.  

James Sproule, director of policy at the Institute of Directors, told the Daily Mail: “We have concerns that making companies publish average pay differences could produce misleading information. Measuring pay gaps is very complex, and averages do not show whether companies are paying people different amounts for the same work.”

To address this risk, CMI is arguing in favour of reporting that provides comparisons at different levels of seniority.

Patrick Woodman, head of external affairs, said: “A single figure for the gender pay gap could conceal as much as it reveals. To be meaningful, and to give managers the insight that they need to tackle any problems, pay reporting has to be banded to reflect job grades. That’s why we’re recommending that companies provide that extra level of detail when they report their data.”

Politicians who support the new measure, such as Labour’s spokesman on women and equalities Gloria De Piero, recommend using annual equal pay checks – breaking down salaries across a wider scale – to ensure accurate measurement of the progress being made.

De Piero has also called for the Equality and Human Rights Commission to conduct an annual review of companies’ pay data when the regulations come into effect.

Visit www.managers.org.uk/mindthepaygap for further information on the gender pay gap or complete the online consultation on gender pay reporting here before it closes on 6 September.

Join the conversation online by following @cmi_managers and @XpertHR, and using the hashtag #mindthepaygap