With just six months to go until the April 2018 deadline for employers to file their first gender pay reports, we take a look at the manufacturing sector figures that have been published so far to see whether we can draw any conclusions for our sector and provide tips for employers who have yet to prepare their reports.
Gender pay gap reporting requirements
As we have reported previously, the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (the Regulations) make gender pay reporting mandatory for employers with 250 or more employees. Affected employers must report on the overall gender pay gap and the gender bonus gap within their organisation based on both mean and median pay, as well as the proportions of male and female employees who received bonuses over a 12 month period and the distribution of male and female employees across quartile pay bands. The main gender pay gap calculations must be based on employees’ hourly rates of pay during the relevant pay period that includes the 5 April ‘snapshot date’, while bonus pay gap calculations must be based on bonuses paid in the 12 months leading up to that date (i.e. the period 6 April to 5 April).
Manufacturing sector reports so far
Six months after the first snapshot date has passed, and with just six months to go until the reporting deadline, it is perhaps surprising to hear that only 114 employers have so far uploaded their reports on the Government website. And, of these, just 15 employers have identified themselves as belonging to the manufacturing sector. We’ve had a look at the figures for those 15 employers and the following points seem worthy of note:
Across the 15 manufacturing companies to have reported so far, the average reported mean gender pay gap was just 7.1%, which is much lower than we would have expected based on data we’ve seen from the Office for National Statistics and our knowledge of the pay landscape in the manufacturing sector. The highest reported mean gender pay gap was 25.9%, while the lowest was a negative pay gap of -21.9% (i.e. women at the company in question were paid 21.9% more than men). In fact, 2 out of the 15 companies reported a negative mean gender pay gap, and this obviously affects the average gap across these 15 companies. Leaving out the 2 companies with a negative pay gap, the average reported mean gender pay gap across the remaining 13 companies was 11%, which is still significantly lower than we would have expected to see.
Amongst the 15 companies, the average proportions of men and women receiving bonuses are roughly equal, at 26.2% and 24% respectively, and only 10 out of the 15 companies reported that men received higher bonuses than women.
The average quartile pay bands distribution across the 15 companies demonstrates what a male-dominated sector manufacturing is, with men making up the majority of all four quartiles. The average figures are:
lower quartile = 65.6% male, 34.4% female
lower middle = 68.8% male, 31.2% female
upper middle = 72% male, 28% female
upper quartile = 75% male, 25% female
Often the gender pay gap is explained (at least in part) by reference to the predominance of men at the higher end of the pay spectrum and the predominance of women at the lower end. In this sample, however, there are significantly more men than women across the board and there is not a great difference between the proportion of women at the bottom and the top – a factor which may go some way to explaining the relatively small average gender pay gap across the 15 companies.
Need for a narrative
Of the 15 employers who have reported so far, only 9 have provided links to their own websites, where they set out their figures in greater detail together with accompanying narrative reports. In our view, a narrative report to provide some context is of key importance for manufacturers (as we’ve explained in detail in a previous blog post). With that in mind, we’ve put together a factsheet highlighting some statistics about women in manufacturing which employers might find helpful when preparing their own narratives.
Publish or be damned?
The early reported figures present a mixed picture, with a significant difference between the highest and lowest gender pay gaps. Also, a few of the figures appear surprising, and we wonder whether there might be a few mistakes or distorting factors in some of the calculations. With such a small sample size, it is difficult to draw meaningful conclusions as to what the figures reported so far say about the gender pay picture in our sector overall, but employers who have yet to report should not feel daunted or seek to put off the task ahead.
Our recommendation is that employers who haven’t yet made a start on their gender pay gap reporting should do so as soon as possible, particularly given the extent of the necessary data-gathering exercise and the complexity of some of the calculations. We have plenty of resources available to help with this (see below) and, once their reports are ready, employers can decide on the most appropriate publication date in advance of the 4 April 2018 reporting deadline taking into account, for example, their organisation’s annual reporting cycle and any other internal or external communications issues.
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 legal requirements. We will tell you what you need to do, when, and how best to do it. We will help ensure that your organisation is not only compliant but 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