"Hopefully we will start to see the gaps narrow in 2020": Gender pay gap reporting is released

The gender pay gap in 78% of UK businesses favours men, according to reports which had to be submitted yesterday and analysis by the BBC.

Almost half of the businesses that responded, 45 percent, saw their pay gap widen and seven percent saw no change in their gender pay gap.

Some businesses had pay gaps which favoured women, which amounted to 14 percent, but the majority favoured men.

Legally, companies or public sector departments as well as charities with 250 employees or more have to publish their gender pay gap information.

This is the second year that this has been a legal requirement, and any that fail to do so will face legal action from the Equality and Human Rights Commission.

You can find out the median pay gap within a company by calculating the difference in pay between middle-ranking female employees and middle-ranking male employees.

The key sectors, according to BBC research, all pay men on average more than women. The finance and insurance industry have a median hourly gender pay gap of just under 25 percent, only second to the construction industry.

In response to the published statistics, Rachel Mapleston, legislation expert at the HR, payroll, and analytics software provider MHR, said: “The widening discrepancy in gender pay although alarming does not come as a great surprise. With this year’s reporting deadline based on snapshot dates of 31st March and 5th April 2018, employers that didn’t take the time to evaluate their results and start to implement changes were never going to see much of a difference.

“Employers who identified a gap but chose not to act on this information may well be seen in a less favourable light than those with initially bigger pay gaps who have demonstrated they are working towards reducing them.

“As part of their inaugural report last year employers were asked to include a supporting narrative, outlining why their gap exists together with their plans to address it. If organisations have started to act on this then hopefully we will start to see the gaps narrowing in 2020, however this has been an issue since legislation was introduced in the 1970s, so it will likely take many more years to resolve.

The accounting pay gap

KPMG’s median gender pay gap started the most conversations this year since it has risen to 28 percent, compared with PwC’s which is 18 percent, Deloitte’s at 16 percent, and EY’s which fell this year from 19.5 percent to 18.9 percent.

The accounting and finance industry is traditionally considered a very male-dominated industry, although far more women do start off in the profession at entry level now than used to be the case.

In last year’s Accountancy Age salary survey, there was an overall gender pay gap of 21.5 percent. In practice the pay gap was lower at 19.2 percent while in industry it sky rocketed to 24.4 percent.

The main issue identified in this survey, confirming what was already a belief, was that the pay gap formed the higher up the career ladder you move. At part-qualified level, women were actually recorded as earning an average of £28,901 a year while men earned £28,525. As soon as you move up from this level though, men begin to overtake women and it doesn’t stop, with a significant pay gap in favour of men at both manager and partner levels.

Following backlash at the Big Four for not publishing the pay gap data of their partners last year, all of them did reveal the figures this year and they are all high.

It was this which led to KPMG’s median pay gap rising significantly. It didn’t help any of the firms’ causes, for instance Deloitte’s overall gender pay gap is 18 percent but among partners it is 41 percent.

Audiences should be reminded that this year’s data reflects that which was published in early 2018. Any changes that have occurred since the first gender pay gap report came out last year will likely be reflected in the 2019 results.