Pay gap reporting is a much-debated and often-maligned initiative designed to demonstrate how businesses across the UK differ in their approach to remuneration for different communities within their businesses.
The main point of confusion that normally results from this type of reporting stems from a general misunderstanding of the meaning of the findings, as some conflate the gender pay gap with equal pay for similar work, which has been legally required of businesses since 1970.
What is the gender pay gap?
But, as the recently released report from the Royal Academy of Engineering and the WISE Campaign shows, equal pay is not the issue. In fact, in engineering occupations, with all other factors being equal, the pay difference is less than 1%. Put simply, men and women working in the same roles are being paid the same.
However, the report shows that the mean gender pay gap in engineering sits at 10.8%, meaning men are paid at a rate a little more than a tenth higher than that of women. The findings also demonstrate a difference in bonus payments of 5.4%.
The good news is that these differences are lower than the gender gap across the UK economy, as the mean salary gap sits at 16.2%, with a bonus payment gap of 18.4%. But even though the engineering industry is clearly not the worst sector for women’s pay, there is a good deal of work to be done.
What causes the gender pay gap?
The difference in pay can, as with most industries, mostly be explained by the number of women in less senior positions. The RAE and WISE’s research shows that 91% of people in the top career grade are men, and men make up 92% of the upper pay quartile.
Women are entering the engineering industry, but they are much more likely to leave and much less likely to reach the upper echelons of their profession than their male colleagues. This leads to a demonstrable difference in the average salary, as women remain in lower paid positions.
How can companies address their gender pay gap?
So, while the recruitment of women remains a key priority, it is equally important for companies to consider their retention strategies, as well as structured pay and progression structures.
Businesses with a serious interest in narrowing their gender pay gap must think about how women can be supported to continue and grow their careers once they’re in position, rather than simply focussing on attracting more women through the door in the first place.
This can include looking into flexible working options, implementing returners and retrainers programmes, and reviewing existing promotion and pay rise criteria to identify any bias or barriers to progression. These are all long-term, incremental changes that can eventually improve a company’s gender balance, and therefore, their gender pay gap.
“In engineering, as elsewhere in the economy, the causes of the gender pay gap are structural and cultural. They will not be fixed overnight.”Closing the Engineering Gender Pay Gap, a report from the Royal Acadmey of Engineering and the WISE Campaign (2020)
Why should we tackle the gender pay gap?
To return to the positives, businesses can see clear benefits from taking action to address their own pay gap.
The report demonstrates several positive outcomes from targeted action, including improved trust within the workforce, as employees feel confident that their business is dedicated to diversity and inclusion; a boost to talent attraction, as candidates are drawn to ethical and fair working practices; and the potential to win additional business, as many clients across a range of sectors require their supply chain demonstrates the same values as their own businesses.
For more information, to read the whole report, and to get excellent recommendations on where to start in addressing your gender pay gap, visit the WISE Campaign website.
Questions or comments? As always, you can contact Helen Addis on firstname.lastname@example.org.
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