Businesses need to work together to close gender pay gaps

The construction industry has one of the largest gender pay gaps
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Employers need to work together to tackle broader industry-wide challenges in order to close the gender pay gap, PwC has urged.

Its analysis of the mean gender pay gap data published last month found that the industry a business operates in was a far better indicator of the size of its gender pay gap than the number of people it employed.

The financial services, construction and mining sectors had the largest gender pay gaps, while the accommodation, food, transport and health sectors had much narrower differences in male and female pay.

Its report – Mandatory UK gender pay reporting: the story so far – said that the reasons for the gender pay gap differed between sectors, and similar organisations needed to come together to address the issues affecting their industry.

For example, sectors like construction and mining had high numbers of men in their workforce which skewed their gender pay gap, while the hospitality industry – which had a 7% pay gap – had a high proportion of female employees.

Jon Terry, PwC’s UK diversity and inclusion consulting leader, said high industry-wide gender pay gaps might be putting women off joining certain professions.

“As well as having clear and robust action plans about what they’re doing in their own organisation, there is a real need for industries to come together and show they are serious about creating the right environment for women to prosper,” he explained.

However, PwC warned that the gender pay gap figures should not be looked at in isolation as they do not show the full picture. Businesses should also consider their bonus gap, as it found this was generally twice as high as an organisation’s pay gap.

The report said bonus payments often involve more subjective decision making than salary awards, which potentially increases the risk of unconscious bias. It said 80% of employers had a mean bonus gap in favour of men, and three-quarters of these employers had a bonus gap of more than 10%.

“For some, the performance management processes and decision making of what makes a higher performer may hold some risk of indirect bias. Furthermore, the lower levels of transparency and greater subjectivity associated with many incentive decisions make understanding, identifying and challenging any such bias much harder,” said the report’s authors.

Terry said that as jobs are often poorly defined, staff often find it difficult to progress or achieve performance-related bonuses.

He urged employers to “go back to basics” with job descriptions and to put frameworks in place to improve employees’ chances of success.

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