Treat your gender pay gap report as an opportunity

The gender pay gap regulations have brought “unparalleled transparency”,  Minister for Women Victoria Adams told a packed room at the Royal Academy of Engineering’s annual diversity and inclusion conference on 28 January 2020, with data from almost 12,000 employers now publicly available through the government’s Gender Pay Gap Service website.

WISE research on the gender pay gap for engineers, launched at the Royal Academy conference, identifies three reasons to take your pay gap report seriously.

  1. Talent attraction: when researching prospective employers, women check out and compare their gender pay gaps. Some will ask questions at interview about the gender pay gap and what you are doing about it.
  2. Employee trust: People already working for you will also be interested. Companies who took part in the research told us about internal conversations prompted by their published reports. It is difficult to build trust in corporate statements about commitment to diversity and inclusion unless you are seen to be taking responsibility for addressing the gender pay gap and its underlying causes.
  3. Win business: Engineering firms in the infrastructure business told us that clients take the gender pay gap reports into account when awarding contracts – particularly for government-funded projects.

Three compelling reasons to show that you are a progressive employer by taking a proactive approach. Organisations of all sizes can take the opportunity to make a public statement about your commitment to address the gender pay gap – whether or not you are covered by the mandatory requirements.

The good news is that in our sample of nearly 42,000 engineers, the gender pay gap was two thirds smaller than the average gender pay gap for the UK (10.8% mean compared to 16.2%). This is because engineering salaries are higher than for many jobs where women work. Gender pay gap reports on the government website include the whole workforce, whereas in our research, for the first time, we isolated pay data specific to engineers. The fact that the gender pay gap is smaller for engineering is a great message to encourage more girls and women into the profession.

And there is more good news – we found little evidence of equal pay issues for engineers in our sample. People often confuse equal pay with the gender pay gap. Equal pay is about individual comparisons between a man and a woman doing the same job, whereas the gender pay gap is the difference in average pay for men and women. A regression analysis of data from nearly 42,000 engineers in our sample identified that when all other factors are isolated, gender alone accounts for less than 1% of pay variance.

The most significant factor, not surprisingly, was career level, accounting for 40% of pay variance. 91% of jobs in the top career level were filled by men and 92% of those in the upper pay quartile – significantly higher than the percentage of men in the sample as a whole.

Other contributory factors include differential starting salaries; pay stalling when on career breaks; hours of work (17% of women in the sample work part-time, compared to just 2% of the men); unequal access to bonus payments; a “loyalty penalty” for women, who are less likely to move between employers; opaque progression and promotion systems; and manager discretion, which allows bias to affect hiring decisions.

Transparent pay and grading make a big difference. Employers in our sample who publish salary ranges, as well as pay grades, have a 75% smaller gender pay gap for their engineers than those which don’t. As one of the diversity specialists said in our focus group: “It was all about jobs for the boys – ‘I know someone, I will bring them in.’ Just enforcing due process… is making a difference”.

A transparent pay and progression policy is therefore one of four key recommendations in the report. The gender pay gap figure itself is less important than the actions employers take to improve representation of women in all roles and at all levels. What these actions should be depend on the issues specific to the company – the first step is to analyse internal data to pinpoint what these issues are.

You could explain the gender pay gap by saying, as many do in their published gender pay gap reports, that women are under-represented in engineering and in senior roles. Factually correct, but unlikely to inspire the female engineers you want to attract. Or you could take responsibility for doing something about it. Have a look at the report for practical suggestions – we include recommendations for CEOs, line managers, HR professionals, Board members and engineers themselves. Get in touch with WISE to discuss how we can help.

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