For employees, For employers

What does the gender pay gap mean?

Today is the day the new legal requirement comes into place and UK companies with 250 or more employees will have to publish their gender pay gaps within the next year.

The UK is one of the first countries in the world to require gender pay gap reporting, which currently stands at 18.1%. However, despite this gap, new research by HR and payroll provider NGA Human Resources found that over a quarter (29%) of senior managers do not see the gender pay gap as an issue for businesses.

What are the causes of the gender pay gap?

There are a few factors causing the gender pay gap. According to the GOV.UK website, the causes are:

  • Many high-paying sectors are disproportionately made up of male workers (e.g. information and communication technology)
  • A higher proportion of women work part-time and they will earn less than full-time employees

The UK is one of the first countries in the world to require gender pay gap reporting, which currently stands at 18.1%

gender pay gap

What is happening with the gender pay gap?

Despite the Equal Pay Act that was introduced 45 years ago, women still earn less than men in Britain today. As a result, the government concluded that as of 6 April, UK firms with over 250 employees will be required to report on their pay gap.
The government is taking action by:

  • Requiring large employers in all sectors to publish their gender pay gap
  • Offering 30 hours of free childcare for working families with three and four year olds
  • Encouraging girls to consider a wider range of careers, including those traditionally dominated by men
  • Investing £5m to increase returnship programmes to help women and men returning from career breaks, such as having time off after starting a family.

The government has already:

  • Extended the right to request flexible working
  • Introduced shared parental leave
  • Commissioned a review to look at how the barriers for women can be removed

What did the research find?

The survey polled 250 senior decision-makers who will be affected by the legislative changes. From that, 35% of men said it wasn’t an issue, compared to 22% of women. An additional 14% of men stated there was no need to have a plan in place.
Of those who see the gender pay gap as important:

  • 40% said it generated bad publicity
  • 34% said it would create brand damage
  • 33% said it would develop recruitment challenges
  • 26% identify staff retention as one of the challenges
  • 49% think the gender pay gap is partly caused by the fact that women are more likely to take career breaks, or work part time (42%)

According to Recruitment International, Geoff Pearce, Managing Consultant – Reward at NGA Human Resources, said: “It is cause for concern that a significant proportion of business leaders still do not take the gender pay gap seriously. While compulsory reporting is imminent, progress towards closing the gap will only be made if [organisations] are prepared to put in place meaningful programmes.

“The government’s funding for returnships is a step in the right direction, yet it is up to individual businesses to develop them if the pay gap is to be reduced for good. By addressing their pay gap, organisations will not just have good figures to report on paper, but the commercial benefits of a diverse and fairly remunerated workforce, improving performance, productivity and profitability.”

- By Hannah Sims, editor at Perkbox.

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