Don’t stay silent on pay; it’s time to speak up

17 October 2016 -

Admit it, men probably out-earn women in your organisation

What, you may ask, is the point of bringing in a new law without also introducing a penalty for breaking it?

As employers contemplate how they can comply with the new duty to calculate and report the gender pay gap in their organisations, they may wonder whether there is actually much point in trying.

After all, who is going to haul them through the legal system for failing to do it when the full might of the law has no book to throw at you? The short answer is that something rather more valuable than a £50 fine is at stake – reputation.

The majority of employers will comply. We may grumble when the state interferes with our personal liberties, but, by and large, we are law-abiding people.

So, in due course, most employers will get round to reading the legislation and attempt to carry out the necessary calculations. And if they manage it, they will be shocked by the results.

Most HR professionals will happily tell you that they pay men and women in the same jobs the same amount. Of course they will: we have had laws to ensure that for more than 40 years.

The problem is that the gender pay gap is not about that.

The new law requires employers to calculate an average hourly rate of pay, separately, for all male and female staff, regardless of whether they are the chief executive or office cleaner, and then compare the two.

What that shows up is the difference between men’s and women’s average earnings, based on the fact that, generally, there are more men than women in senior roles, and in functions such as IT that attract higher salaries; and more women than men in low-level roles, and in the types of jobs that tend to get offered to part-timers.

Whether or not you agree with this approach, the gender pay gap it reveals in a country that has had equal-pay legislation since 1970 is quite shocking.

Across the UK economy, on average, men earn 19.2% per hour more than women. This rises to 39.5% in financial services, and even stands at more than 25% in education.

There are, in fact, only two sectors in which women out-earn men. One is the ‘activities of households as employers’. I’m not that familiar with the travails of those looking for servants, but I assume a good housekeeper is harder to find than a gentleman’s gentleman.

The other industry is mining and quarrying, in which, it has to be said, there are relatively few women – but, clearly, they are generally in better-paid jobs.

So, when you publish your own figures on your company website, as the law requires, the chances are that there is going to be a bit of a gap.

What the law does not compel you to do is to offer any explanation of the gap. However, your employees, and potential job applicants, will see these figures and wonder what is going on.

You will be required to submit your data to a government website, and there will be league tables. And what are all those organisations that endorse good business practice, such as Investors in People, going to make of any company that won’t explain its pay gap?

If your gender pay gap is narrow or non-existent, then shout about it. And if it is not, the least you can do is to explain why, and set out what you do to ensure equal opportunities for all.

The silent option carries rather too much of an implicit ‘we don’t care’.

Mark Crail is content director at XpertHR (@Payintelligence). XpertHR offers a free gender pay-gap reporting service for employers in partnership with CMI, enabling them to understand their organisation’s gender pay gap. Visit www.xperthr.co.uk/pages/gender-pay-gap