Recent data investigating the pay scales of just over 10,000 organisations has revealed that 2 in 5 companies (43%) have seen their gender pay gap widen over the past year.
4% of those asked reported no change, while the good work of just over half (53%) has resulted in their gender pay gap having narrowed.
In the year 2021-2022, the pay gap was 12.9%; a decline of 0.3% from 2020-2021. In real terms, this means that on average, women earn 87p for every £1 earned by their male counterparts.
The compulsory reporting of pay grades was introduced in 2017. Since that time, the average gender pay gap has reduced by 0.5%. Progress is slow. If this trajectory were to continue, the report estimates the gap will not close until 2151. In real terms, this is 5 more generations of women.
How will the gender pay gap affect recruitment?
Currently, the job market is incredibly competitive. Across many areas of industry, but especially within tech and STEM, the demand for skilled talent far exceeds the supply. In the short term, this gap presents a significant barrier to filling vacant jobs. In the long term, it may also present sizeable issues for the wider recovery of the UK economy.
For employers and those wishing to hire, the gender pay gap presents an opportunity to attract, hire and retain female talent. Those organisations that address and balance the gender pay gap will stand out from the crowd, becoming an employer of choice. Not only is this true for women, but for all workers wishing to work for a thriving, productive, and progressive employer.
How can your recruitment processes help to address the gender pay gap?
Experts suggest that there are elements of the traditional recruitment process that help to maintain the gender pay gap.
We should avoid asking about salary history during the hiring stages. It isn’t relevant to the offer we should make based on the skillset of the individual and market-rate and sets the expectations of both parties.
Instead, we should offer default flexible working options alongside setting and publishing clear and transparent salary bandings. We should also create career progression opportunities for women that consider career breaks for maternity leave, alongside addressing our parental leave policy to balance the disparity of female worker progression.
Tech and the gender pay gap.
Looking at data from the HMRC, 91.1% of organisations within the tech sector pay their male employees more than their female colleagues. Across the sector, the men’s median hourly pay was 16% higher than that of women. This puts the tech industry well above the national average of 11.6%.
In the tech sector category, 326 companies reported their figures. Of that number, only 29 had a higher median hourly pay for women than men.
What does this mean?
While we agree that these headlines are shocking, it doesn’t mean that women are paid less than men for doing the same job. This would be illegal under the Equal Pay Act of 1970. However, what it does indicate is that men dominate the top-paying jobs within these organisations, and therefore have a higher hourly rate.
Indeed, the data tells us that women working in technology occupied 23.5% of the top-paying jobs, and men the remaining number; 76.5%.
Of course, this has knock-on effects at the other end of the pay scale too. 39.3% of the lowest-paid jobs in the tech industry were held by women.
This gender role disparity also has significant consequences for women when it comes to benefits and bonus packages. As a bonus is often based on salary, it means that on average, women in tech receive 12.9% less in bonuses compared to their male co-workers.
Among women, we cannot neglect the fact that there are other barriers to pay parity. Race, age, and disability are all additional factors that may affect the opportunities, experiences, and pay scales of women in tech.
Great work is being done through organisations such as Tech London Advocates; TLA Black women in Tech. This is a not-for-profit organisation dedicated to building bridges of opportunities in tech. It enables black female talent to excel and for companies to have access to black women of talent.
While many companies profess that workforce diversity is a priority, only 36% actually collect and analyse data to identify the differences in pay and progression for employees from different ethnic groups.
This lack of data highlights the need for mandatory reporting and clear guidance. It is only through knowledge and analysis that unethical pay scales can be highlighted and companies brought to account.
Gender pay is an issue that has significant implications for the workforce and economy. Companies that go to significant efforts to address the imbalances of their gender pay gap will be at a significant advantage when it comes to winning the war for talent. Not only is this a salary issue, but one of career opportunity. Organisations must look to readdress the balance of gender in the C Suite and in higher paying management jobs.
Diversity, Equity and Inclusion (DEI) is an issue that is close to the hearts of today’s workforce. Both women and men employees wish to work for companies that are progressive, ethical, and inclusive. Jobs among organisations that live these values can expect to be highly valued amongst job seekers.