It’s that time of year again where the Gender Pay Gap dominates the headlines. In March last year 7,375 UK stories ran with “Pay Gap” in their title. New research from Opinium shows 64% of Brits have heard about the Gender Pay Gap in the last 6 months. With last year penned the “grace period” for firms, this year looks set to be double the scrutiny for those finding themselves under the spotlight. With less than a month to go until the reporting deadline our new Consultant, Bethan Phillips, examines what’s been creeping out of the woodwork.
FROM BAD TO WORSE
16% of firms, nearly 2,000 companies, have released their gender pay gap data for a second time. And so far in 2019 there have been 1,130 stories with “Pay Gap” in the headline. BBC analysis in February showed at the time of publication the median gap (that is the difference in pay between the middle-ranking woman and the middle-ranking man) in Britain has lessened - it is now 8.4%, down from 9.7% last year. Hurrah? Alas, not quite. In 4 out of 10 companies, the gap is getting worse.
Towards the end of last year, in the midst of Brexit chaos, some firms released their gender pay gap results for 2018- including HSBC and 18 Government Departments. At nearly a third of government departments the gender pay gap has widened over the past 12 months, despite previous pledges to reduce it.
The biggest rise in the median pay gap was reported by the DCMS, where the median gap nearly trebled from 8.2% to 22.9% in 2018. The main reason cited for this increase was a “loyalty penalty”. Whereby progressive policies such as flexi working, targeting working parents, encourage women to stay on in their roles. Only for them to be “screwed on pay” because by being promoted internally they are limited by civil service policy on internal pay increases. However, men who were hired externally at a director level were (surprise surprise) recruited on much higher salaries than their female equivalents.
HSBC might have thought they’d escaped media scrutiny when the press didn’t initially pick up their increase in gender pay gap. Roll on 2019 and a flurry of articles branding HSBC the “worst bank” for the gender pay gap surfaced. Their gender pay gap grew to 61% in 2018, compared to 59% a year earlier. Safe to say- HSBC’s new year wasn’t off to the best start.
Another pay gap offender was the energy giant Npower, whose median gender pay gap has grown from 13% to 18%. This was in part attributed to more female than male employees opting for a salary sacrifice benefits scheme. These schemes were hailed “a positive step towards the company being more family friendly”. There appears to be a recurring correlation between family friendly policies and the gender pay gap, with women suffering the financial consequences. But it also goes to show that Gender Pay Gap reporting is just one crude metric which doesn’t tell the full story behind the number.
BOYCOTTING ON THE INCREASE?
With the second year of Gender Pay Gap reporting well underway, conversations around consumers and potential recruits boycotting brands and businesses because of their gender pay gap are growing. Research from The Equality and Human Rights Commission shows candidates are putting more pressure on companies to show they are pushing diversity and gender equality – with two-thirds of women taking a company’s gender pay gap into consideration. At a panel discussion on The Gender Pay Gap, hosted by Lansons, Opinium and PRCA, Bibi Hilton MD at Golin suggested we will see an increase in consumers boycotting brands with a gender pay gap. An opinion echoed by Allyson Stewart-Allen, CEO of International Marketing Partners. Reputations are certainly at risk, but will consumers actually boycott these businesses? We’re not sure that consumers are really ready to put principle above pricing yet, but we’ll be delighted to be proven wrong on this one!
LONG TERM ACTION PLANS
There are no silver bullets when it comes to fixing the gender pay gap, so we will no doubt see these worsening results continuing to dominate the headlines. Sam Smethers, Chief Executive of Fawcett Society, is urging businesses to draw up long term action plans. She believes they need to illustrate a dedication to making change by producing a 3-5 year strategic plan on how they will improve their gap. A piece of advice reverberated by Chloe Chambraud Director at BITC Gender Equality at the PRCA Gender Pay Gap panel discussion. The pressure is on for the Government to require firms to have a real action plan to address their pay gaps and consequences for those that don’t.