Gender pay gap measured by fewer than one in five private sector firms

Fewer than one in five private sector employers measure their gender pay gap, latest figures have revealed.

The alarming findings were based on a study of more than 700 HR professionals which found that only 18% of private sector firms monitor the pay difference between men and women.

The full-time gender pay gap currently stands at an average of 17.1%.

The vast majority – namely smaller companies – consider this unnecessary for their business, the autumn 2009 Chartered Institute of Personnel and Development (CIPD)/KPMG Labour Market Outlook survey found.

And in the public sector, where equal pay monitoring is a statutory requirement, it emerged that two in five employers (43%) only complete audits to tick the necessary bureaucratic box.

The high cost of conducting a gender pay audit – estimated to be at £5,000 per review – could be putting firms off. The cost is 50 times higher than government calculations.

Yet, the government 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, said: “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.”

Ingrid Waterfield, KPMG head of reward, said: “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.”

Equality campaign group the Fawcett Society last month called on the government to enforce gender pay gap reporting.

A report by the women’s campaign group found that while the pay gap for both part-time and full-time work was 21.2%, this more than doubled to a 52.7% gap in west Somerset.

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