Gender, ethnicity and disability pay gaps: policies and practices changing minds

Blog posts

16 Nov 2017

Adam Elston, Senior Research Fellow

'Look at my skills, not my identity.' I noticed this slogan, which was accompanied by an image of a job applicant holding up their CV to obscure their face, on a billboard for a recruitment site while waiting for my train into work the other morning.

It is a laudable campaign, I thought, but it is also depressing that advertisers feel that this is something of which employers, and wider society, need to be convinced. Unfortunately, they are right.

Last Friday, 10 November, marked a date that, as the Fawcett Society highlights, marks the point in the year in which women in the UK workforce effectively stop earning in relation to men (or to put it another way, based on last year’s average pay gap of 13.9% men could take the remainder of the year off from this day and still have earned the same as women by year’s end).

The Office for National Statistics shows that the average gender pay gap for full-time employees is currently running at 14.1 per cent (median at 9.1%). The average for all employees’, reflecting the fact that there are more women working in part-time jobs (an issue in itself), is at 17.4 per cent (18.4% at the median).

It is shocking statistics such as these, and decades of tireless pressure and campaigning by individuals and groups to bring them to the public’s attention, that have resulted in the new gender pay gap reporting regulations that came into effect on 5 April this year. These regulations now require all employers with over 250 staff to publish their average and median pay gap figures.

A glance at the government’s gender pay gap viewing service, where this information is published, shows that a mere three per cent of the estimated seven thousand affected employers have so far managed to respond.

What about the data that has already been submitted? The average premium that male employees can expect to earn relative to their female colleagues is 11 per cent (the average of all the average gender pay gap figures supplied) with the median (the average of all the medians) running at nine per cent.

As many will know, organisations that are required to submit data have the option to provide a narrative, or commentary, explaining their report. Many, but not all of the employers, have done so (at the time of writing, 139 out of 223 reporting organisations provided a link to their narrative report – it’s not clear if others may have provided a narrative in another format that can’t be displayed on the site or simply chose not to provide one).

I was struck, reading through some of these narratives, by the circularity in some of the reasoning put forward to explain the gap in pay. For example:

‘The gap exists because of the concentration of men in senior posts…’

or

‘…a far higher proportion of women work in part-time roles.’

One well-meaning organisation in its narrative even ‘adjusted’ for the gender imbalance in their senior posts to show that their pay gap was actually very small! These are precisely the structural issues and ‘taken-for-granteds’ that need to be addressed.

As Fawcett Society’s chief executive, Sam Smethers, said on the Today programme last Friday, an increase in effective policies and practices is still required to bring about these changes. Among employers, she mentioned equality of parental caring responsibilities as just one of the changes still required to shift the balance towards equal responsibility and, more importantly, adjust thinking away from the presumption that it is solely the role of women to on the duty of care for children. We at IES support this, and consider the harmonisation of maternity/paternity pay as necessary to give life to the unimpressive take-up of the benefit (recent research by People Management, for example, suggests that only just around seven thousand men took advantage of the shared parental leave (SPL) policy in the 2016-17 tax year).

Two years on from the introduction of the SPL Scheme, Maria Miller MP, chair of the Women and Equalities Commons Select committee, appeared less than enthusiastic:

'Shared parental leave has been a key family friendly policy of this government and its introduction two years ago was very welcome…However…(w)hether it be the financial implications of taking up SPL or the attitudes and culture of employers, this policy may not be having the intended effect.’

This is just one of many external policy aspects that need looking at – and there’s many more. Education is, of course, another. Indeed, the Office for Nuclear Regulation, in its gender pay reporting narrative, partially explains its average gender pay gap of 33 per cent with reference to the fact that its specialists in higher grades are from an education system where men have predominated in STEM subjects.

At IES, our work on pay and diversity issues and our research focusing on specific employers shows that effective diversity policies, properly implemented, really can bring about a shift in mindset, and that it is in everyone’s interest to do so.

A forthcoming case-study that we have carried out at global information technology firm FDM Group, for example, shows precisely this. The Group, one of the first to report under the new regulations, has been working towards pay parity for years, and using a variety of processes and practices. The average gender pay gap at the firm is just six per cent with a median gap of zero per cent, and this is in technology, a sector traditionally dominated by men (and where the pay gap, according to a recent Mercer survey, stands at 25%).

The case-study looks in detail at some of the approaches the firm takes in working towards pay parity, and not just in gender. Among those measures are areas such as:

• Leadership
• Investing in talent
• Appropriate policies and practices in place
• Effective use of data

In each of these areas there is evidence of a careful, coordinated and specific approach to tackling inequality. However, pressure has to remain until all policies and practices become the norm. Research carried out by IES on behalf of the Equality and Human Rights Commission earlier this year considered government and employer initiatives to tackle gender, ethnicity and disability pay gaps. This research found that there is still a long way to go, especially where disability and ethnicity pay gaps are concerned. This is one of the points emphasised in the Fawcett Society’s Equal Pay Day press release. While the gender pay gap overall is running at 14.1 per cent, for black African women stands at 24 per cent, and for Pakistani and Bangladeshi women it is 26 per cent.

The more proactive that government, employers and educators can be in bringing about the policy changes and changes in practice, the better it will be for everyone, from employers able to attract and retain the best people, to employees in the workforce and, consequently, to the economy as a whole. This isn’t some utopian pipe-dream and the example of FDM is a good one. Like that billboard said, FDM Group is not looking at identity, it is looking for the skills that will contribute to the organisation’s ongoing success, and, by putting in place those practices and policies that change mindsets and cultures, it brings about a richer, fairer, more diverse and more successful place of business. The challenge is to continue working to make this happen as a matter of course, across all organisations in every sector.  

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Tackling gender, disability and ethnicity pay gaps: a progress review

 

 

 

  

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.