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The UK Busts the Gender Pay Gap Wide Open

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Thousands of employers will publish their gender pay gap figures for the first time from today (April 6), helping break the glass ceiling and create a more modern workforce. The UK is one of the first countries in the world to require gender pay gap reporting and follows the government’s commitment to introduce the requirements at the last election. This is a key part of the government’s work to eliminate the gender pay gap. Voluntary, private and public sector employers with 250 or more employees will be required to publish their figures by April 2018. The regulations will cover approximately 9,000 employers with over 15 million employees, representing nearly half of the UK’s workforce.

The UK gender pay is already at a record low of 18.1%. These requirements will help employers to identify the gaps in their organisations and take action to close the gender pay gap. Ensuring that women have the same opportunities as men to fulfil their potential in the workplace is a key part of building a country that works for everyone, as the Prime Minister made clear in her first speech outside Downing Street.

Minister for Women and Equalities, Justine Greening, said: “We have more women in work, more women-led businesses than ever before and the highest proportion of women on the boards of our biggest companies. This has helped us to narrow the gender pay gap to a record 18.1 per cent – but we want to eliminate it completely. “Helping women to reach their full potential isn’t only the right thing to do, it makes good economic sense and is good for British business. I am proud that the UK is championing gender equality and now those employers that are leading the way will clearly stand out with these requirements.”

The benefits of helping women to unlock their talents are huge – eliminating work-related gender gaps could add £150 billion to our annual GDP by 2025. That is an opportunity that neither Government nor businesses can afford to ignore.

As part of the new regulations, employers will be required to:

Publish their median gender pay gap figures

By identifying the wage of the middle earner, the median is the best representation of the 'typical' gender difference. Employers will be asked to use data from a ‘snapshot’ period in April to calculate this average.

Publish their mean gender pay gap figures

By taking into account the full earnings distribution, the mean look at both the low and high earners in an organisation – this is particularly useful as women are often over-represented at the low earning extreme and men are over-represented at the high earning extreme.

Publish the proportion of men & women in each quartile of the pay structure

This data will show the spread of male and female earners across an organisation, helping to show employers where women’s progress might be stalling so they can take action to support their career development.

Publish the gender pay gaps for any bonuses paid out during the year

As there is a significant issue around bonus payments in some sectors, employers will also have to publish the proportion of male and proportion of female employees that received a bonus during the year.

Employers will also be encouraged to publish an action plan alongside their figures, demonstrating the steps they will take to close the gender pay gap within their organisation. The Government is working with leading employers who are exploring publishing their figures early. The Government Equalities Office has also launched its new campaign page where employers can access resources, case studies and publish their gender pay gap figures.

The new gender pay gap mandatory reporting requirements are part of wider work the Government is doing to support women in the workplace. This includes £5 million to increase returnships, offering 30 hours of free childcare, and introducing shared parental leave and new rights to request flexible working. There is also extensive cross-Government work to get more women into the top jobs at the UK’s biggest companies and to get more girls taking STEM subjects at school.

Creative Opinions

 

Sam Smethers, Chief Executive at Fawcett Society

This is the most significant legal change since the Equal Pay Act and we strongly welcome it. For the first time large employers will be required to calculate & publish their gender pay gap. Employers should see it as an opportunity not a threat. Through gender pay gap reporting they can address the productivity gap & get the best person for the job at the right level.”

 

Acas Chief Executive Anne Sharp

Compulsory gender pay reporting starts this week. The new requirement provides a great opportunity for organisations to consider whether they can do more to develop their talented women and secure the benefits of greater gender diversity at all levels. The UK has made progress in reducing the gender pay gap but we still have lots to do - tackling the issue is in the interests of individuals, organisations and the economy as a whole. Acas guidance on gender pay reporting provides businesses with practical advice on how to carry out the calculations and on family friendly working to reduce the gap.”

 

Sir Philip Hampton (Chair, GSK) and Dame Helen Alexander (Chair, UBM plc), Chairs of the Hampton-Alexander Review: FTSE Women Leaders

An uneven distribution of men and women through the different levels of an organisation can be a significant cause of a gender pay gap. The Hampton-Alexander Review wants to see more women in senior executive positions and on the board. We’re asking FTSE 350 companies to build on their recent progress by meeting the 33% targets for the board and senior executive positions by 2020. We also urge them to be more transparent about the numbers of women at the top. Those companies taking action are helping to close the gender pay gap by harnessing the skills and experience of talented women. They also recognise that it addresses the underrepresentation of women in senior positions and costly loss of their skills to British business and the economy.”

 

Emma Codd, Managing Partner for Talent at Deloitte UK

Today sees a big step forward in the journey to achieve gender parity in the UK. For the first time people will be able to see the gender pay gap of large employers at one fixed point in time, with this gap measured and reported in a consistent way. They will be able to read about the causes of each company’s gap and the actions that are being taken to close it; they will also be able to determine for themselves those companies that are serious about this and those that are not. This is a massive shift in transparency – and without any doubt is a hugely positive thing. Previously reporting our own gap gave us an opportunity to show not only that we fully understood why we had a gap, but also the significant actions that we are taking to close it. We were able to clearly show that these actions were focused on delivering long term meaningful and sustained change – through both a focus on our culture and targeted interventions - and that it is the responsibility of our firm’s senior leadership to ensure this change happens. This transparency has shown itself to be a positive for us – both in terms of our current workforce and those considering joining us; we look forward to continuing on this journey.”

 

Francis Ingham MPRCA, Director General, PRCA

The PR and communications industry is aware of the issue and is responding to it. When we surveyed the industry in August 2015, 80% of respondents said that the industry should voluntarily adopt a lower limit than the 250 employee limited proposed by the Government. Which is why the PRCA committed to annual gender pay gap reporting and including it in the industry kitemark’s diversity module. Several key players in the industry report their gender pay gap and offer their staff flexible working opportunities and we must rightly recognise their work. With the upcoming gender pay gap legislation, those at the very top will be leading the way in disclosing their gender pay gap due to the legislation and change is in progress; those who fall outside of the legislation must make the same effort. For reasons of equality; for the very fact our industry is 64% female; to reflect the world we wish to live in; for the advancements being made; and for the next generation of PR and communications practitioners.”

 

Ann Francke, CEO of the Chartered Management Institute

The gender pay reporting regulations are a great way to encourage employers to figure out how they can equalise what they pay their men and women. Creating transparency and setting targets are just the start; businesses must take a hard look at the reality of the many causes, like casual gender discrimination. We may live in more enlightened times but clearly we still have some way to go. Men and women have an equal role in creating a company culture that benefits all, so managers must call out any bad behaviour whenever they witness it. Today’s regulation is a real opportunity to create a more inclusive, more diverse, and more productive workforce – all of which is vital if Britain is to thrive post-Brexit.”

 

Jayne-Anne Gadhia, CEO of Virgin Money

What gets measured gets managed and what gets published gets managed even better. Gender imbalance has a direct impact on average male and female salaries. In Virgin Money we are committed to achieving a 50:50 gender balance throughout the business by 2020. Gender pay gap reporting will encourage all companies to put diversity and inclusion at the heart of their practices and work hard to ensure progress in this area.”

 

Sheila Flavell, Chief Operating Officer at FDM Group

Gender pay gap reporting is an important first step towards creating greater gender equality. At FDM Group we pride ourselves on our commitment to diversity and strive to create equality in all aspects of our workforce. In developing a culture that supports diversity, social mobility and inclusion, we have learned that if you measure and monitor, you can take proactive steps to understand where the issues lie and devise strategies to develop a culture that supports and improves gender parity.”

 

Verity O'Keefe, Senior Employment and Skills Policy Adviser at EEF

The transparency this data will drive is important, but it must also be recognised that the simple snapshot it will provide may often hide a more complex picture. Manufacturers are likely to unearth some higher than average figures. However, this is not due to a lack of support for women in our sector, far from it. Manufacturers offer enhanced and competitive maternity pay and schemes, flexible working and structured career and training plans. Instead, the problem is at the grassroots. Just a handful of engineering apprentices and graduates are female and far too few young girls are studying those all-important STEM subjects. Until we are able to move the dial on female recruitment we are unlikely to see much movement on closing the gender pay gap.”

 

Sarah Churchman, head of diversity at PwC

Simply reporting numbers won’t change things, this is the opportunity for organisations to understand what’s happening in their business and take bold actions that drive to the heart of the issue. This could include organisations creating more returnship programmes and setting targets for female representation at all levels. The gender pay gap is just one data point that organisations should be tracking to help set informed diversity targets across the business. It will be hard to reach true equality in the workplace if organisations don’t address their gender pay gap in the wider context of their business. At PwC, publishing our gender pay gap since 2014 has allowed us to understand why there is a gap and hold ourselves accountable to make changes. For example, we know that a sizeable part of our pay gap is a result of having fewer women in senior positions, so this is an area where we continue to focus our efforts. We’re also challenging our recruitment processes, making more senior jobs available on a flexible or part-time basis, and have introduced a returnship programme to get senior women back into the business. We report our gender pay gap, alongside our gender targets by grade, for all to see in our digital annual report. Solving the UK's gender pay gap is a win-win for everyone. Our Women in Work research shows that fully closing the gender gap in the UK could boost women’s earnings by £85bn.”

 

Emer Timmons, Chief Marketing Officer and President of Strategic Sales for Brightstar and member of the Women’s Business Council

As a member of the Women’s Business Council (WBC) and co-chair of the Men as Agents for change committee, I wholeheartedly embrace the Gender Pay Gap Information regulations. This is exactly the kind of regulation that will shake up the industry, and I truly believe it will be a positive force for change. Gender pay inequality isn’t just a societal issue – equality benefits us all, especially a company’s bottom line. WBC estimates that equalizing women’s productivity and employment to that of men could lead to a 35 percent increase in the UK’s GDP – that’s almost £600bn. By recognizing that women should not, and will not, be discriminated against through their paychecks is an important and crucial step on the path towards a fairer UK. I’m also proud to sit on the executive committee for Brightstar, the world’s leading mobile services company for managing devices and accessories across the wireless ecosystem, which as a company is actively engaged in this movement. We have made significant progress in decreasing the gender pay gap and continue to strive towards completely eliminating it. Helping the current and next generation of women in business is something that we all have a responsibility to do, and we all need to be agents in driving this change.”

 

Lynne Atkin, HR Director for Barclays UK and member of the Women’s Business Council

Barclays is committed to ensuring women have the opportunity to play a full role in the economic life of the nation, and to increase the talent pipeline. Our Bolder apprenticeships programme offers apprenticeships to those over 24 years old, while our Welcome Back programmes encourages women to return to the workplace after a career break. It is essential we support women not only at the start of their careers, but throughout, to help women fulfil their potential and encourage the diversity we both want and expect at all levels in business today.”

 

Deirdre Michie, Chief Executive of Oil & Gas UK

Publishing details of the gender pay gap is very welcome because transparency helps to shine a light around the gap that continues to exist. While many companies are already taking steps to tackle the issue, this approach provides an opportunity for many more companies to be aware of the challenges of ensuring gender diversity in their workforce, which is ultimately undermining their own competitive edge. Understanding this gap can then help prompt companies to take constructive steps to close the gap by, for example, actively encouraging and supporting women to move into more senior and STEM related roles.”

 

Clive Hickman, Chief Executive, MTC (Manufacturing Technology Centre)

The MTC fully supports gender pay gap reporting and it is important that every company achieves a good gender balance throughout their organisation to enable a balanced growth of the business and long term sustainability. Gender balance in engineering companies is often difficult to manage as historically relatively few women have chosen engineering as their career. At MTC we are actively promoting STEM education in schools and we are determined to achieve improving diversity amongst our engineering team. As an example we are striving to recruit between 25-35% women for our 2017 graduate and apprentice intake with a long term objective to push this even higher.”

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