Beware of the (gender pay) gap

If you are a woman working in engineering, (or any other job for that matter), it is likely that your male colleagues are getting paid more than you. This is particularly true for women over 40, according to figures from the Office for National Statistics, which estimates the average gender pay gap (between median salaries) in the UK to be 19.2% rising to 35% for over 40s.

Gender pay gap for median gross hourly earnings 1997-2015 (ONS)

Is this true for your company?  Noone knows – YET! Current reporting requirements are voluntary and only five companies have bothered to do the maths (well done Tesco, PwC, Deloitte, Genesis Housing, and Friends Life). But this is changing and becoming mandatory. From April 2018 anyone working in a firm with over 250 employees in the UK will know exactly what the gender pay gap is because firms are going to have to report it both as an average and a median value.  These numbers will be published by the government and ranked in sector based league tables.

For companies in engineering, infrastructure and construction the gaps are going to be big – huge in fact. Thanks to the great work done by the IET we know that only 6% of engineers are female. We also know that this is a sector which struggles to recruit and retain women so the high salaries are going to male employees. And for all of the excellent work that some companies are doing to encourage more diversity into the sector, there are still many firms that don’t think they have a problem.

This reporting requirement then is set to be a wake up call for companies to address the cultural and structural issues that have historically ensured that men progress to higher positions and get paid more. Financial security company Friend’s Life for example has used its gender pay gap data to recognise that its talent pipeline was weighted towards men and introduced a range of measures to support women moving into senior roles. As the firm said: “We take the old adage, ‘What gets measured, gets managed’, one stage further. We believe that, ‘What gets published, gets managed better’.”

It is therefore going much further than the mandatory reporting requirements and examining:

  • Workforce profile overall, at management levels and by grade
  • Gender pay gap by grade
  • Employee engagement response rates and scores
  • Length of service by age group and gender
  • Sickness absence levels
  • Sickness levels by major disease state
  • Grievance cases by gender, including cases upheld
  • Employee Assistance Programme uptake
  • Duration of absences over one month

Its efforts have already led to an increase in women in senior roles at the company – something that engineering firms could learn from.

Last week I was at a session on the new reporting requirements run by the Employment Law team at Clyde & Co, which was organised by the Major Projects Association as part of its Gender Balance Initiative. The big message from this to firms was ACT NOW. Although the reporting deadline is April 2018 the pay data has to be taken from April 2017. So if companies want to know what their gender pay gaps look like before being forced to reveal them (and explain them) to the entire world then undertaking a trial run is a good idea. Whether companies will do this or not remains to be seen but the clock is ticking and those that make the effort to understand, and act, on the issues will be identified as the most inclusive, and attractive to women. And for engineering companies seeking to both meet the skills gap and diversify their organisations this will be a huge advantage.

  • A summary of the MPA gender pay gap reporting event is available here

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