Simply publishing data will not solve the gender pay gap
Gender pay gap reporting, which began last year, was heralded as a sign that the government was finally taking action to address the inequality women experience in the workplace. With companies forced to ’fess up to their unfair pay practices, the hope was that they’d be motivated – through public outcry, embarrassment, or maybe even a desire to do the right thing – to balance things out.
However, new figures compiled by the BBC show that the pay gap has actually widened at many companies over the last year, throwing into question how effective the new pay gap reporting rules have
really been.
The study looks at the median pay gap at the organisations, that is the difference in pay between the middle-ranking man and the middle-ranking woman, and shows that four in 10 private firms publishing pay gap figures have reported wider gaps than last year.
This time last year, the organisations reporting their pay gaps were under much more scrutiny – only natural, given it was the first time they were forced to make such information public. At the time, the government warned that although the numbers might illustrate a stark difference between the pay received by men and women, these firms must be allowed time to change things.
Evidently, some companies will need more time than others.
There are sure to be explanations for some of the widening pay gaps. Perhaps the women working at some firms were so disgusted with the initial disclosures they moved on to greener pastures, leaving the data skewed even further in favour of the men. Or maybe it’s a consequence of the worsening skills shortage: it could be that women just aren’t applying for roles at these companies.
This is an issue that will need to be tackled on a baby-steps basis. That means setting achievable targets and making it a requirement that companies demonstrate that they are taking action to meet them
But another explanation is that the gender pay gap reporting rules don’t, in themselves, actually address the problem of inequality, and so organisations feel compelled to publish yet experience no compunction to make changes. The system, as it stands, requires that any organisation with 250 or more employees publish specific figures on their gender pay gap on a public website and report the same to the government. If employers fail to report on time, or provide inaccurate information, they risk facing legal action from the Equality and Human Rights Commission (EHRC), with penalties including court orders and fines.
It’s not enough though; the threat of the EHRC failed to convince as many as 500 companies to reveal their pay discrepancies on time last year.
Meanwhile, once the firms have bothered to publish the data they can basically wash their hands of the issue until the next year. There is no requirement to show that anything is being done to improve matters. The government offers “guidance”, but there is no action that any firm is obliged to take.
Nor are there any targets in place. Now, this might seem redundant: the target is ostensibly to close the gap completely, and that’s an admirable aim. However, the UK currently has one of the widest overall gender pay gaps in Europe, and it’s been hard enough to convince companies to comply with the reporting deadline alone.
This is an issue that will need to be tackled on a baby-steps basis. That means setting gradual, more achievable targets, and making it a requirement that companies demonstrate that they are taking action to meet them, at the very least. These targets should also be widened out, to tackle the diversity pay gap and disability pay gap too.
The BBC’s research serves as a valuable reminder that we can’t accept lip service to problems of inequality that can, quite easily, be addressed.
All the government’s reporting rules show is what we already know: women in the UK workforce are at a
disadvantage. With no real onus to improve this situation, many companies won’t make any effort to do so.