There has been a lot of sometimes very loud discussion of the recent requirement that UK businesses produce a report on their gender pay gap statistics. One of the interesting things about the whole furore surrounding it was the automatic assumption that women would be on the wrong side of the gap. Obviously, this is generally true, as the initial data and the press coverage surrounding the run up to reporting showed. What is interesting though is the fact that it would seem that everyone knew the gap existed and very little practical effort had been made in the grand scheme of things to resolve the problem. In some ways, that says as much about the situation as the reports that followed. It certainly showed a need to bring this issue to light.
It seems an appropriate time to look at the gender pay gap reporting and what it actually means, because, having completed ours, we now have first-hand experience. As an aside, completion is also proving to be an issue for the government because as of the deadline, over 1500 companies had not done so. There will presumably be the fines the dire warning promised for the business that didn’t comply.
Essentially, the main breakpoint for compliance was to have over 250 employees. While we do not have 250 employees at Personnel Selection, the number includes contracted, part-time and agency workers. Again, this raises questions about the validity of the overall results, because a business with say 200 employees is still a fairly large employer. In fairness though, there clearly does need to be some watershed point.
The initial findings nationally are a disappointing but unsurprising number with 78% of public and private sector areas reporting that they paid men more than women. In some businesses, the gap was huge, with women being paid over 50% less than men, and the bonus payments (one of the measures of pay balance) being an area of significant difference along with the expected hourly rate. It’s not good reading, and there is a link below to the reports by business on the .GOV website if you want to look more closely at the numbers.
So, what does all this mean in practical terms?
Well, firstly it has presumably made a lot of waves in some businesses, and we can safely assume that where numbers are significantly different, there will be some changes in the pipeline. Practically through, these are not going to be easy to implement and big numbers rarely lead to a simple solution. To suggest that a huge wage increase or a pay cut as a solution is clearly naïve because big reports need to be broken down to small local actions. Not because there is no will to, but because it stops being about the report and starts being about people, contracts, businesses, financial considerations, workforce, industry conditions and a hundred other factors.
Our Gender Pay Gap Report
Using our own report as an example, you can see how easy it is for the figures to not really reflect the actual situation. At first sighting, the Gender Pay Reporting (GPR) stats for Personnel Selection seem very odd. However, this really does demonstrate the need for a clear assessment of what the numbers mean rather than what they appear to say.
The reason for the odd figures is largely down to the fact that Recruitment Agencies are required to combine their supply of Temps together with their own staff in reaching these statistics. In our case, the Temps are split evenly in numbers, although Females lead in the commercial sector and Males in the Industrial sector. Very few Temps are paid bonuses.
However, nearly 80% of our own staff are Female, which is not unusual in the Recruitment sector and all of those staff are on some form of commission. Commission is treated as a Bonus in the government definition of how to report salaries. In essence, then, we are in an industry that has a balance towards women workers and payment of commission. This makes it seem like we have a gender pay gap in favour of women on hourly rate and men in terms of bonus paid because of the number of additional factors in the equation.
The slightest glance at the way the reports are put together in comparison with the business that is producing the report, in this case, our own shows that the end result is only a true picture when put into perspective. These statistics then are clearly meant to alert companies to Gender Pay issues they may be unaware of.
I am pleased to report then that for us the statistics show that there is no Gender Pay Gap of any significance and indeed Female Basic pay is very slightly higher than for Males. These measures have been designed by the government, and do not attempt to compare rates of pay for similar jobs. They are designed to assess the overall levels of pay for the genders, as such they are of limited use, beyond waving a general possible warning flag, at a more local level unless they are interpreted correctly.