Government confirms medium-sized businesses will NOT have to report on gender pay gap from 2020.
Much has been made of Gender Pay Gap Reporting and although well intentioned, it has not been without its complexities. Companies have struggled to locate accurate data to make and verify the six calculations required. HR, PR and marketing teams have wrestled with how to comment on the gaps and companies were late to publish – some in the hope that their results would get ‘lost’ among the headlines of others.
Almost one year on, and with the next deadline looming, we know now that the gender pay gap in the UK is 9.7% (median pay gap). That is to say that men working for companies with more than 250 employees are paid on average 9.7% more than their female counterparts. We also know that 78% of organisations pay more of their salary bill to men than women.
This can be for a number of reasons. An organisation may employ significantly more men than women. Most often, it is where the senior roles that carry the largest salaries are predominantly occupied by men. Critics are citing women having career breaks when having a family followed by a lack of support and/or desire to return to a progressive career as being a major contributing factor. This in turn has prompted calls for greater support in the work place and greater recognition for the need of flexible working for all workers, that supports and develops their career aspirations.
What is undisputed is that the process by which organisations sourced and ratified their data before performing and verifying their calculations was onerous and challenging. It is in part for this reason that despite the Business, Energy & Industrial Strategy Committee (BEIS) recommending that medium sized organisations (those with 51-250 employees) also undertake Gender Pay Gap reporting from 2020, the government confirmed in January 2019 that this will not be the case. “Given the range of metrics required, it was felt that reporting could be particularly burdensome for small and medium-sized businesses and so the requirement should be restricted to large employers,” the response said. Great news for those of us who already have 101 other things to take up our time but less so for those who want a ‘full picture’ of the nation’s gender pay gap – as almost half of employees work for small or medium sized companies.
So, what happens next? We’ll know more after the deadlines in March (public sector) and April (private sector) this year. Will Ryanair still ‘top’ the charts at 71.8% difference? Will more than 14% of companies have a pay gap in favour of women? Will the idea of reporting on ethnicity in the same way (ethnicity pay gap reporting) develop further? Time will tell. In the meantime, if you want to see for yourself what your company’s gap is, follow the calculation here.
How to calculate the median pay gap.
Step 1. List all of your employees, their gender, how much they earn and how many hours they work to calculate their hourly pay.
Step 2. Create a new list that only includes the men from the previous list. Sort the list from highest hourly pay to lowest. Identify the entry in the middle of your data (mid-point). This is the median hourly rate for the men in your company.
Step 3. Repeat step 2, this time for the women.
Step 4. Calculate the following.
Median hourly rate for men-median hourly rate for women
—————————————————————————— X 100
Median hourly rate for men.
This is your gender pay gap. A negative number means you pay more to women than men, a positive number means you pay more to men than women.