Government 'faces uphill struggle' to promote effective action on the gender pay gap

The CIPD The Chartered Institute of Personnel and Development Europe's largest HR and development professional body with over 135,000 members, issued a press release on the 12th November 2009 entitled "Government 'faces uphill struggle' to promote effective action on the gender pay gap, despite today's ASHE results"

With the latest Office for National Statistics showing that the equal pay gap across all measures has narrowed, the CIPD today reports survey evidence of employer practice and attitudes to measuring the gender pay gap in the workplace. The figures show that the equal pay gap between men and women has improved from 12.6% to 12.2% for full-time work, while the equal pay gap between men and women has also narrowed from -3.7% to -2.0% for part-time work.

The CIPD argues that the results strengthen the case for voluntary equal pay reporting given the complexity of the problem, as illustrated by the fact that hourly earnings for women are higher than men's for part-time work.

The autumn 2009 CIPD/KPMG Labour Market Outlook (LMO) survey, conducted by IPSOS Mori, finds that fewer than 1 in 5 (18%) private sector employers measure their gender pay gap, the vast majority, and especially smaller employers, considering this unnecessary for their business. In the public sector, where equal pay monitoring is a statutory requirement, 2 in 5 (43%) employers only complete audits to tick the necessary bureaucratic box rather than as part of an underlying effort to advance gender equality.

The survey findings are likely to disappoint the government which has included provisions in its Equality Bill to require private and third sector organisations with more than 250 employees to report on gender pay gaps if too few are doing so voluntarily by 2013.

Dianah Worman, CIPD Diversity Adviser says: "Judging by these survey findings the government faces an uphill struggle in its efforts to change employer attitudes to closing the gender pay gap, which the latest ONS figures will undoubtedly show still remains far too wide.

The bulk of private sector employers appear complacent about the gap - especially smaller employers who won't in any case be affected by the reporting provisions of the Equality Bill - while many public sector employers seem more concerned about complying with their statutory reporting duty than driving genuine gender equality in the workplace. The findings overall suggest that compulsory pay audits are at best a blunt instrument for promoting effective action on closing the gender pay gap and highlight the need for government to instead focus on helping employers in all sectors understand the business benefits of tackling unfair treatment on pay."

Employers that do measure their pay gap report that it provides useful insights and benchmarking data (60%) and helps inform pay reviews before they take place (43%). However, the survey finds that the average cost of conducting a gender pay audit is more than £5,000 - fifty times higher than government estimates.

Ingrid Waterfield, KPMG Head of Reward says: "We would encourage all employers to investigate their pay structures from the perspective of fairness and equality whether or not legislation is introduced to this effect. Equal pay audits can help to tangibly measure the achievement of fairness, and we believe that a fair approach to reward and recognition has a positive impact on employee engagement. Leading businesses examine their pay gaps not because of Government, but because they understand the reputational and legal damage in not getting it right."

The Equality Bill, which is currently making its way through Parliament, will introduce provisions to enforce gender pay reporting on private and third sector organisations of more than 250 employees. The Government says it will not make reporting compulsory until 2013 if voluntary progress is deemed to be insufficient.

The gender pay gap as measured by median hourly pay of full-time employees, excluding overtime, was 12.8% in April 2008. The latest figure, for April 2009, will be published by the Office for National Statistics on Thursday 12 November alongside other results from the Annual Survey of Hours and Earnings (ASHE).

The cost of reporting on the gender pay gap was estimated to be £5,105 in the CIPD/KPMG Labour Market Outlook. This is higher than the Government's estimation.

Source CIPD