techUK hosted DAC Beachcroft LLP and the Government Equalities Office for an interactive roundtable session with our members on Gender Pay Gap reporting regulations and its successful implementation.
Women in working in the UK are paid on average 19.2% less than men in the UK. This is an indicator of a number of broad issues in the workplace, and one of the key reasons such a wide gender pay gap exists is due to the lack of women working in lucrative careers in STEM sectors.
To address inequality in the tech sector, through targeted actions and collaboration with others, techUK’s Women in Technology programme aims to attract and retain talent from as broad a demographic as possible and increase diversity within the tech sector. The business case is clear to improve these statistics: evidence shows that diversity leads to better decision-making and commercial success. By encouraging women to enter or return to the tech industry at all levels, we become more competitive and more innovative.
Recently announced Gender Pay Gap reporting rules will affect the tech sector significantly and to better prepare techUK members, Khurram Shamsee and Ceri Fuller of DAC Beachcroft LLP outlined some of the context, likely requirements and implications for members in the room. Following their session, Frances Smith of the Government Equalities Office explained what the gender pay gap is (and what it isn’t), some of the causes of the gender pay gap and the policy considerations for driving Gender Pay Gap transparency.
In February 2016, the Government published a public consultation on the draft regulations for employers to report gender pay and bonus gap information. The requirement will impact private, and voluntary sector employers with 250 or more UK employees, with employers expected to start calculating and reporting their pay gap from April 2017.
The power for the Secretary of State to require employers to report their gender pay gap sits in section 78 of the Equality Act 2010 and has been kept under review since then. Although Gender Pay Gap reporting is a difficult topic for a number of companies to tackle and the calculations require a number of steps, there is still time to prepare.
The regulations are currently publically available in draft and some (more likely technical) aspects may change following the public consultation. The requirement to report on gender and bonus pay, as well as publish salary quartiles, will shine a spotlight on the issues and ensure those employers in scope engage with the topic. The metrics that employers will have to publish will have to be signed off by a director (or equivalent – see section 8 of the draft regulations) of an organisation, it will also ensure senior members of large organisations address the issue.
The gender pay gap shows the difference between the average (mean or median) earnings of men and women as a percentage of men’s earnings. The gender pay gap varies by industry sector, occupation, age group and even working patterns. So the gender pay gap is not the same thing as equal pay. Paying men and women differently for doing the same or equivalent work is discrimination and has been against the law since the Equal Pay Act was introduced in 1970. While this does still happen in some cases and can be a component of the gender pay gap, it is not the main reason that men and women’s average salaries differ. An employer delivering equal pay may still have a large pay gap and an employer with a small pay gap may be breaching the law.
The causes of the gender pay gap are both at the business level and the societal level and can have a significant cumulative impact on a woman’s earning potential during her lifetime. We know that too few women get to the top and too few work in the more lucrative professions and sectors (like Science, Technology, Engineering and Mathematics for example). We also know that women are much more likely than men to take time out of the labour market to start a family, look after children or other family members and that there is a lack of well-paid part-time work available to men and women. Other contributing factors include constrained individual choice, corporate cultures, unconscious bias and discrimination.
This isn’t about ‘fixing the women’ however - according to Project 28-40 (over 25,000 respondents) run by Business in the Community’s Gender Campaign, 70% of women have a desire to be a leader and 77% of women have confidence in their ability to lead, exploding the myth that women just lack confidence or ambition.
We also know that some sectors face bigger challenges than others such as STEM and Tech where there is a lack of young people studying the necessary feeder subjects – in particular women.
Whilst the gender pay gap is the lowest on record there is no place for a gender pay gap in today’s society which is why the Government want to accelerate progress by implementing mandatory reporting for large organisations. Reporting is about “creating the pressure for change and being in possession of the facts to focus efforts in the right areas.” The reporting is in place to create conditions for change – something the techUK Women in Tech programme focuses on as a priority.
A £0.5m support package has also been set aside to help companies implement the regulations, including employer-friendly guidance, UK-wide conference events, free online software, targeted support for sectors facing bigger challenges like STEM and the publication of a report highlighting those businesses trailblazing in this area.
For more information on what the gender pay gap is and actions businesses are taking to successfully tackle it, download the Government’s Transparency Trailblazer’s report. For more information on the reporting & regulator details, DAC Beachcroft have published a helpful guideline.
To learn more about techUK’s Women in Tech Programme, have a look at our programme pages or get in touch with Doniya Soni.
{bio}doniya.soni@techuk.org{/bio}