By Ben Smith - 30 April 2018
The deadline to report gender pay data for eligible firms was 4 April 2018 and no doubt you will have seen the deluge of press coverage on the topic. Below we look at what the first year of data has revealed about the gender pay gap in the UK (spoiler alert: it’s a widespread problem across sectors).
To very briefly recap, the Gender Pay Gap Regulations (the “Regulations”) require that a pay gap be expressed as a percentage. Therefore, a pay gap of 25% means that for every £1 a man earns, a woman earns £0.75 (and a pay gap of -25% would mean that for every £1 a woman earns, a man earns £0.75).
As of 18 April 2018, the overall figures, based on a “snapshot” of pay on 5 April 2017, are as follows[1]:
87% of employers report a pay gap showing men are paid on average more than women. These pay gaps range from 0.1% to an eye-watering 87.8% (Swansea City Association Football Club Limited) and 159% (Millwall Holdings Plc).
Sector Analysis
The largest pay gap is found in the financial services industry, where there is an average hourly pay gap of 26.2% and an average bonus gap of 45.9%. Other high pay gaps are in the legal sector (an hourly pay gap of 20.7% and a 38.1% bonus gap) and construction (an hourly pay gap of 21.8% with a bonus gap of 30%). The lowest pay gap is found in the hotel and restaurant sector, with an average hourly pay gap of 8.1% (and an average bonus gap of 10.6%). This can perhaps be explained by the high number of workers paid at the minimum wage in the sector.
A tendency towards men in senior roles contributes to pay gaps
A major factor contributing to a gender pay gap seems to be a concentration of men in more senior roles. On average men make up 62.7% of the upper pay quartile so this is a widespread issue, but we can see its effects particularly potently in a slew of female-dominated companies that have nevertheless reported significant pay gaps.
Suspicious figures – just how accurate is the data?
The scale of the pay gap revealed across sectors and the avalanche of press coverage suggests that gender pay – and wider conversations about diversity - will remain a hot topic.
Look out for more content in the coming weeks from GQ|Littler as we help you and your business navigate this tricky area.
[1] These figures are the median, rather than the mean, of all reported data as of 18 April 2018. The median is used as the mean is skewed by outliers in the data meaning the median is the more helpful measure.