British firms make returns for gender pay gap survey

By midnight on Wednesday every company in Britain employing 250 or more people is required by the government to publish data on its gender pay gap – the difference between hourly earnings of men and women.

About 9,000 companies are expected to report, although nobody – including the government – seems entirely sure of the precise figure.

Companies have had a year to turn in their calculations but many have left it as late as possible to make the data public, with hundreds rushing to report in the run-up to the deadline.

As of Tuesday evening, some 8,800 businesses had submitted their figures to a government website, where they are available for anyone to view. If companies continue to file at the rate they were yesterday, the final tally will be well above the government’s estimates of 9,000.

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The gender pay gap is often confused with equal pay – a recent survey by the TSB banking group showed almost three-quarters of people believed they were effectively the same thing.

But the two are very different. Equal pay – the same wages for men and women doing the same work - has been a legal requirement in Britain for almost half a century, since the Equal Pay Act of 1970.

The gender pay gap, on the other hand, measures the difference between the earnings of all men and women across an entire organisation, and is expressed by calculating women’s pay as a percentage of men’s.

Part-time workforce

For the country as a whole, the gap stood at 18.4 per cent in 2017 – meaning men earned 18.4 per cent more than women, according to the Office for National Statistics. This was down from 27.5 per cent in 1997 and includes both full and part-time workers. Excluding the part-time workforce, which is dominated by women, the gap falls to 9.1 per cent.

Some of the worst offenders have left their reports until the final few days, no doubt hoping their gigantic pay gaps will be lost in the avalanche of data being submitted by other companies.

Predictably, many of the late filers have rocketed towards the top of the pay gap league, including household names such as Ryanair. It emerged on Tuesday that the budget airline pays women 71.8 per cent less than men; in other words, for every £1 men earn, women earn 28.2p. And that’s the gap excluding the highly paid Michael O’Leary and his senior – male – management team, who are not included in the figures as they are based in Dublin.

Highly paid airline pilots have traditionally been men while the lower-paid cabin staff is mostly female. Many airlines thus have wide gender pay gaps, but the Irish carrier is now the worst in the industry. Looking at the figures, it’s not hard to see why – of the 554 pilots Ryanair employs, just eight are women.

At its low-cost rival, easyJet, the median hourly pay gap is 45.5 per cent, meaning women earn 54p for every £1 paid to men. The airline employs 86 female pilots compared with just over 1,400 men and says it wants one in five of its new entrant pilots to be women by 2020.

Other industries with very large gender pay gaps include banking and finance, particularly investment banking. At Barclays, the gap in investment banking was 43.5 per cent, falling to 14 per cent at the high street bank. At Goldman Sachs, the figure was 36.5 per cent.

Not audited

Critics have dismissed the gender pay gap initiative as a deeply flawed exercise. For example, the figures are not audited and a number of companies are thought to have submitted incorrect information, whether by accident or design.

Some City firms have calculated their figures after excluding highly paid partners on the rather dubious grounds that, as partners, they are not actually employees.

Companies report both mean and median pay gaps, and the figures can be strikingly different, making it hard to see what the actual position is. It’s also not clear how the requirement to report will be enforced, particularly given the uncertainty over how many companies are covered by the exercise.

So is it a worthwhile process – and will it make any difference? The answer is a resounding yes. The huge publicity the data has been given – and the ability of female employees to track the trend at their own company on the easily accessible government database – should ensure that pressure for change is maintained.

Shareholders will also want to know what moves companies are making to narrow the gap. And the easiest way to do that is to employ more women in senior roles throughout the company.

Fiona Walsh is business editor of theguardian.com