While there has been a great deal of publicity over the past year around the new gender pay reporting requirements applicable to employers with over 250 employees, several official publications released recently attracted surprisingly little media fanfare. In this blog, we look at new data from the Office for National Statistics (ONS), a Government report on employer attitudes to gender pay reporting and recommendations from the Government Equalities Office (GEO) on how to reduce the gender pay gap (and what they mean for manufacturers).
Gap in manufacturing above national average – but falling
New ONS data published in November shows that the national average median gender pay gap across all industry sectors now stands at 18.4% – that’s a reduction of 4.1% in the past decade. In the manufacturing sector, progress on reducing the gap has been slightly stronger, with a 4.5% drop since 2008. Based on the ONS latest figures, the median gender pay gap in our industry stands at 20.8%.
Although the gender pay gap in our sector remains above the national average, when you consider the make-up of the manufacturing workforce, it is perhaps surprising that our industry’s gender pay gap isn’t higher. According to data from the Labour Force Survey for the period July to September 2017, women still make up a small proportion of the employed manufacturing sector workforce, just 26.1% (compared with 24.5% for the same period ten years ago). It is also apparent, and as confirmed in the pay quartile data published to date on the Government’s gender pay gap reporting website, that those women who are working in manufacturing predominantly fall into the lower pay quartiles (presumably because they are largely employed in junior roles) – and this is another factor that helps to explain the gender pay gap in our sector.
Employers want to reduce the gap – but aren’t sure how
Another November publication that has received little media attention is a Government survey of employer attitudes to gender pay reporting. Based on the views of 900 large employers, the survey indicates that 61% of organisations view reducing the gender pay gap as a high (24%) or medium (37%) priority. The survey included questions on how employers thought they might be able to reduce their gender pay gap, and what they felt could be barriers to them doing so. Respondents acknowledged that one way to help reduce the gap could be to attract more women to their workforce – the idea being that, even if women start out in junior roles, as they work their way up to more senior levels the gap will gradually fall. However, the survey also showed that many employers consider the difficulty of attracting women to work for them as a major barrier to reducing the gap, and this was especially true of respondents in the manufacturing sector.
GEO recommendations tricky for manufacturers
The final November publication to consider is the GEO’s “Gender Pay Gap: Closing it Together”, which sets out recommendations on how employers can reduce the gender pay gap. While some of the GEO’s suggestions are helpful, others may be difficult for manufacturers to implement in practice:
- As noted above, one key step is to recruit more women. The GEO’s tips on this include ensuring job adverts have gender-neutral language and recruiting through a wider variety of channels. It also advocates using structured scoring systems and skills-based tests when evaluating candidates to remove the risk of bias in hiring decisions.
- The GEO also recommends designing every job as flexible by default, advertising every job as flexible from day one, and examining and removing barriers to flexible working. While these are laudable aims, they do not take into account the operational difficulties of offering flexible working where factory production lines are concerned!
- In view of the general acknowledgment that more men taking time out of work to look after their children/sharing this responsibility with mothers would help with the gender pay gap, the GEO’s recommendation that companies with enhanced maternity pay schemes also consider offering enhanced pay for shared parental leave seems to make sense. However, in manufacturing, many companies offer very generous enhanced maternity pay specifically to boost female recruitment and retention. Since extending this across the board would likely be financially unsustainable, a danger of advocating equalised SPL and maternity pay is that this could actually lead to a reduction of enhanced maternity benefits.
- Finally, the GEO urges companies to: ensure their pay and reward structures are underpinned by job evaluation; offer roles and development opportunities to all staff with similar levels of performance; and review distribution of performance ratings between men and women to guard against bias. These are sensible suggestions, but require buy-in at all levels of management if they are to be effective.
You have a plan – should you shout about it?
The gender pay reporting requirements do not include any obligation to publish an explanatory narrative or action plan – and the Government survey indicated that just 1 in 5 employers intended to publish any additional information alongside their mandatory reports. Despite this, we strongly recommend publishing a narrative statement to explain why your gender pay gap is as it is – and, if you’re doing that, you could also consider including an action plan detailing what you intend to do to reduce the gap. This is not a step to be taken lightly. Any narrative must reflect reality, and you must take care not to make empty promises in your action statement. Your gender pay report will remain on your website for 3 years, and you don’t want to face accusations down the line of having failed to follow through.
That said, it’s worth noting that a good narrative/action statement could help you attract new talent (male or female). According to a Business in the Community survey of over 1000 employees, 92% would consider an organisation’s gender pay gap when applying for jobs and more than half of female respondents would favour a company with a smaller gap and/or one that’s more proactive in closing it if choosing between employers.
Time for action
With the deadline fast approaching, it is imperative that employers who are required to report on their gender pay gap and have not yet done so get going on this! A narrative (and action plan, if you choose to create one) will require careful preparation, and the calculations themselves, though simple on the face of it, can be more complex and time consuming than anticipated. This is a particular risk in sectors such as manufacturing, where pay commonly comprises multiple different elements, each of which must be analysed to determine whether they should be included in the gender pay gap calculations. Indeed, the complexity of the reporting requirements is highlighted by the fact that only 32% of respondents to the Government survey thought they would be able to complete their reports without any external support or advice.
How EEF can help
We have detailed guidance in the Resources and Knowledge section of the EEF website on how an employer should go about gender pay reporting, and we can of course advise you on the steps you should be taking and what approach you might want to take to any unresolved or difficult issues.
Our seminar series – “Gender Pay Reporting: How to comply” – will take you step by step through the gender pay reporting requirements. We will explain what you need to do and how best to do it to ensure that your organisation is not only compliant but is also shown in the best possible light. Click here to book your place now.
In addition, EEF can support you on a consultancy basis according to your needs, whether that involves a full spectrum oversight of the reporting process and actions to respond to your gender pay information or targeting a specific area of concern, such as internal and external communication of gender pay results. For further information, please email HREnquire@eef.org.uk