What I learned doing Gender Pay Reporting

Women are paid less than men on average because of these 3 reasons

Over the past few years, I have completed Gender Pay Gap reporting for companies across the UK in different industries. In essence, this reporting compares male and female pay across all roles in a company, with a focus on hourly pay. When completing this reporting, I am seeing very similar results every time. The reasons why the gap is barely reducing seem consistent across the board.

When you think about it, the whole notion of a pay gap still existing between men and women is ridiculous. Women should be paid as much as men for doing the same job, period. From my experience, women work just as hard (if not harder) and often make better managers. Obviously don’t want to generalize here, but there is nothing I have seen that shows me men deserve to be paid more. The right to equality should be enough to get them paid the same as men. But also, men don’t do things that women can’t so should not be rewarded more. It should all be down to the value you bring, not your gender.

Companies are STILL making the same mistakes. Here are the 3 things I saw that contributed to the pay gap barely reducing and even increasing in some cases.

1. Top leadership hires were nearly always men

When I reviewed new hires in the reported period, the board of directors and new heads of lucrative technical functions were usually men. Sure at the mid-manager level, you could see the gap reducing, and often there would be more female hires but at the top level, there seemed to be a common pattern emerging. As we are probably all aware by now, those at the very top get a disproportionate amount of the total payout. If you keep hiring men at the top, the gap is not going to reduce any time soon.

2. More women hired as a total, but mostly at lower quartile level

When completing the reporting, one of the elements is separating pay into 4 quartiles. This involves putting all male and female pay in order from lowest to highest and then working out who falls in each quarter. The lower quartile is employee pay that falls into the lowest 25% and the upper quartile is pay that is in the highest 25% of pay.

There did often seem to be a conscious effort to hire more females than males. I say this because the company would boast about how they had hired more females than males before I started doing the analysis. They concluded this should go about reducing the gap, right? Wrong.

I found that although more women were employed than men, there was a disproportionate amount falling into the lower quartile or lower middle quartile, with fewer new hires coming in the top two quartiles.

3. More women were eligible for bonuses, but the total payout was lower

This follows on from the previous two points. Despite more women as a whole being eligible for a bonus, the average bonus received was much lower than men. Often, companies try and increase the total bonus payout each year (although poor performance and market conditions can affect this). It is a good look for a company to pay bonuses as it highlights the company is doing well financially and signifies that this is a good place to work.

If you are hiring more women at a lower level and hiring more men at a senior level and increasing the bonus pot, the gap between average bonus pay distributed to males and females is going to increase. It is quite obvious if you think about it. Bringing executives in with crazy bonuses and then comparing this to lower quartile bonus earners is going to have a significant impact on the total value.

Bringing more women into the workforce is great, but if you are mainly hiring in lower-level roles, this is going to drive the middle value down. Combine this with the male figure going up due to more senior men entering the workforce and your gender pay gap is just going to go from strength to strength.

Do we need government intervention?

Can we trust business leaders to do the right thing and pay men and women equally? It doesn’t look like it.

Analysis by New Street Consulting Group showed, on average, the pay for an FTSA 100 female director is £237,000 — just over a quarter of the £875,900 paid to their male counterparts.

This is pretty shocking when you think about it and supports what I found.

It seems the only option really is to have laws that are implemented to ensure people are paid adequately and fairly, regardless of gender. Full transparency of pay and more female representation at the top are needed to tackle this head-on.

Powerful men at the top are making decisions based on self-interest and have shown that they can’t be left alone to tackle this. Some work has been done in recent years to address the gender pay gap, but unfortunately not enough to secure equal pay for all, regardless of gender.