Closing the Gender Pay Gap

This week’s deadline for disclosure on the Gender Pay Gap has prompted over 10,000 companies to make statements about the variance between men’s and women’s salaries as well as a wave of criticism that it’s a crude exercise, open to misinterpretation. That criticism may be valid, but surely it’s helpful to have some transparency on the issue, in order to stimulate informed debate. Although there has been legislation in place since 1970 to ensure that those doing similar jobs are paid equally, the Equality Act 2010 did not previously require companies to provide data on the relationship between gender and earnings across the organisation.

So what can we learn from the data? The median pay gap among all companies that have reported is just under 10% but in some organisations it’s much larger. Ryanair is cited as one of the companies with the largest gaps, with men paid almost 72% more than women. It helpfully points out that this is due to the fact that pilots tend to be made and cabin crew tend to be female – which is precisely the root of the problem.  If people are paid equally for the same work, then the issue driving pay disparity is that men are disproportionately represented in the higher paid jobs.

The gender pay gap data that has been published is not perfect, but it’s a step in the right direction. Until now, much of the debate on gender pay issues has rested on claim and counter-claim and there has been no consensus about how to quantify the scale of the problem or measure progress. We now have a baseline, and some facts that can be interrogated to develop better understanding and used to shape meaningful interventions. As Hans Rosling says, sometimes the most factful action you can take is to improve the data.

Private and public sector organisations with 250 or more employees are obliged to report on their gender pay gap, albeit on slightly different timescales. I would argue that companies below the threshold should also do the analysis, and the most enlightened might even consider disclosing voluntarily. The reporting criteria can be found here.