As an attempt to increase awareness and improve pay equality, the UK has introduced compulsory reporting for organizations who employ 250 people or more. The data provides a view of the disparity between the pay of males and females, but also offers a platform
for the conversation on how organizations can make quicker advances when it comes to tackling inequality in the workplace.
What is the difference between equal pay and the gender pay gap?
While both equal pay and the gender pay gap deal with the disparity in pay women receive in the workplace, they are two different issues:
Equal pay is when a man and woman are doing the same role and the same work for the same pay.
The gender pay gap measures the difference between men’s and women’s average earnings across an organization.
How is it calculated?
The gender pay gap is based on the median hourly gap between men and women. The median is the figure in the middle range when everyone’s wages are lined up from smallest to largest. The median gap, illustrated below, is the difference between the middle
of the salary range for male employees and the middle of the salary range for female employees.
How big is the gender pay gap in the UK?
The overall gender pay gap in the UK is 18.1 percent, displaying the disparity between average pay given to men and women.
What is the problem?
While there are many organizations where women are well represented, this is predominantly in the lower quartiles, with men still overrepresented in top ranking positions. This problem is not tied to one or two sectors. In fact, the report shows that there
is no sector in the UK in which women are paid better on average than men.
How to face the issue
The gender pay gap is a consequence of the fact that more men occupy more senior, and therefore more highly paid roles across organizations. The debate will continue to be a complex issue, but there are steps organizations can take to make quicker advances
when it comes to tackling it.
To understand what is required to get more women in higher-paying roles, many organizations will have to look for a change of company culture. From removing conscious or unconscious bias among hiring managers to enabling some form of flexible working options—building
a diverse and inclusive culture will make progress towards that cultural change.
Comprehensive benchmarking procedures with a regular reporting basis will also complement pay gap reporting, allowing for constant feedback to measure progression and understand how your organization is addressing the gender pay gap.
For your organization to be truly efficient in fair pay, other dimensions need to be considered when analyzing gender equality. These include indicators such as performance attainments, performance ratings, how long the employee has been in the position,
seniority, absentee rate, promotion rate, professional experience, and more.
These detailed analytics will allow your organization to identify explainable gaps categorized by the indicators above, and unexplainable gaps that could highlight potential discrimination in the business.
Ultimately, when women are adequately represented in the top quartile of businesses, the pay gap will shrink. The road towards equality may be a long one, but starting this conversation through the data shown in the gender pay gap report is the first step.