Transparency and the Gender Pay Gap: What it Means for Organisations

In the run-up to new legislation, the gender pay gap has been at the forefront of discussions in business and of how organisations must work to close the gap as they scramble to report their figures. A recent report conducted by Sage, with supporting data from the Office for National Statistics (ONS), and the Annual Survey of Hours and Earnings (ASHE), reveals the current measurement of the gender pay gap in the United Kingdom.

Since April 2018, all employers with 250 employees or more are required to publish their gender pay gap data every year. Historically, the Office for National Statistics (ONS) has also recorded gender pay gap information by gathering data from the Annual Survey of Hours and Earnings (ASHE), which is a survey of individual employee pay. These figures include all employers and not just those with 250 or more employees. The figures from the ONS report a national gender pay gap of 18.4% (2017).

Figures recorded by ASHE show that since 1997, the gender pay gap is getting smaller. In 1997, the pay gap for all employees was 27.5% and that has reduced to 18.4% for latest figures recorded in 2017.

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Data source: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2017provisionaland2016revisedresults

Globally, the United Kingdom ranks 12th in terms of the gender pay gap. In a review of male median earnings compared to women, the OECD recorded a 16.8% difference.

Sage3Data source 1: https://data.oecd.org/earnwage/gender-wage-gap.htm Data source 2: https://stats.oecd.org/index.aspx?queryid=54751

Sage’s report also highlights the importance of subconscious bias towards gender, noting that tackling such bias is the first step in combatting discrimination and inequality in the workplace.

The report shines a light at those at the top and proposes that managers and decision makers should receive training to ensure that they don’t hold any unconscious bias during interviews, promotion selection or salary review.

Ultimately, Sage’s report highlights that business is built on a foundation of its employees and people that are valued will be more productive, more creative and will be a better representation to both clients and customers. Gender pay gap equality is therefore not just good for the women in employment, it’s also good for business. According to the Government Equalities Office, the benefits of gender diversity filter across all areas of business including reputation, recruitment and retention:

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In addition, McKinsey also reports that by closing the gender pay gap, the estimated increase to the UK’s GDP would be a significant £150 billion.

 

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To find out more about gender pay gap reporting, read Sage’s comprehensive review and advice article.

 

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