According to the Office for National Statistics (ONS), the gender pay gap in the UK is 18% in favour of men across all nine major occupation groups, and 9% for full time workers – even where women outnumber men. New legislation has shone light on gender pay gap data for over 10,000 companies across the UK – but before getting in to some of the statistics, let’s take a look at the issue itself.
What is gender pay gap?
Not to be confused with equal pay legislation where it’s illegal to pay men and women differently for equal or similar work; gender pay gap is the difference in average pay between all men and women in a given workforce.
Why does it exist?
The pay gap exists for several reasons:
- Part-time roles and caring responsibilities are not shared equally. The ONS reports that there are more than three times as many women working part-time than men, which tend to be lower paid.
- According to the ONS, women are more likely than men to work in low-paid sectors such as care and leisure, as well as in administrative jobs. For every five full-time care and leisure roles, four are performed by women.
- There are more men in senior roles than there are women. McKinsey reported that women on average account for just 12 percent of the members on executive teams in the UK.
New government legislation enforced last year by the Equality and Human Rights Commission requires employers with 250 employees or more to publish its annual gender pay gap data. Employment experts suggest this legislation could have a greater impact on reducing the earnings gap than four decades of equality legislation, which would be a massive step in the right direction.
In addition to calculating the pay gap, companies must also calculate the gender bonus gap, the proportion of male and female employees that receive a bonus, and the proportion of men and women working in different pay quartiles.
How is gender pay gap calculated?
Is is calculated by subtracting the average female hourly earnings from the average male hourly earnings, and dividing this number by the average male hourly earnings.
To calculate gender pay gap, companies have to pull information from their payroll systems including data on number of employees, pay information, bonuses, working hours and employment status. Guidance and additional resources can be found here.
And the results?
The BBC reported that just over 10,000 companies published their data in advance of the April deadline, with over 1,000 reporting on the very last day. Of the companies that had submitted their figures, 78 percent pay men more than women, 14 percent pay women more and 8 percent said there was no gender pay gap based on the median of 9.7 percent.
You can look up the gender pay gap data for your employer, or any given company (that has reported their results) here. Let’s take a look at the reported figures for some of the biggest names in tech:
Google: Women’s mean hourly rate is 17% lower than men’s and when comparing mean hourly rates, women earn 83p for every £1 that men earn.
Facebook: Women’s mean hourly rate is 0.8% lower than men’s and when comparing mean hourly rates, women earn 99p for every £1 that men earn
Microsoft: Women’s mean hourly rate is 6.6% lower than men’s and when comparing mean hourly rates, women earn 93p for every £1 that men earn.
Amazon UK Services (administration and support service activities): Women’s mean hourly rate is 2.1% lower than men’s and when comparing mean hourly rates, women earn 98p for every £1 that men earn.
Amazon Online UK Limited (professional scientific and technical activities): Women’s mean hourly rate is 17.4% lower than men’s and when comparing mean hourly rates, women earn 83p for every £1 that men earn.
Apple: Women’s mean hourly rate is 26% lower than men’s and when comparing mean hourly rates, women earn 74p for every £1 that men earn (although the company says the pay gap is 2 percent in favour of women when all UK employees are taken together).
How can companies address the gender pay gap?
Igniting discussion throughout the organisation about barriers to progression is a great place to start. Initiatives such as flexible working, shared parental leave, and supported return to work programmes will help address some of they key reasons why the gender pay gap exists in the first place.
The McKinsey study on diversity showed that companies in the top quartile for gender diversity are 15 percent more likely to have financial returns that exceed their respective national industry medians, and that for every 10 percent increase in gender diversity on senior executive teams, EBIT rose by 3.5 percent.
Even though it is only companies with more than 250 employees who are legally obligated to publish gender pay gap data, there are many smaller organisations that have taken this initiative on their own accord. Regardless of the size of an organisation, diversity is good business period.
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