Over a third of gender pay gap could be down to bias

More than a third of the overall gender pay gap in the UK could be the result of discrimination and negotiation differences between men and women an in-depth study has revealed.

The study, by employer review and job site Glassdoor, found that 39% of the gap could not be explained by “observable factors” in Glassdoor’s data.

The authors’ interpretation of this figure was that it stemmed from the “difference in the way the labour market rewards men and women with the same characteristics” and was the result of factors that remained “unexplained due either to observed factors or subtle forms of workplace bias and discrimination”.

Of the 61% of the gender pay gap that could be explained, 37% was the result of sorting of men and women into different industries and occupations and 23% was because of differences in education and experience between males and females.

The authors stated that another way of putting this was that: “Individual worker characteristics explain only about one quarter of the UK gender pay gap. By contrast, the fact that men and women systematically work in different roles explains almost 40%.”

As Personnel Today reported last week, the median gender pay gap is slowly narrowing, now standing at 17.9% according to Office of National Statistics figures. But more revealing is Glassdoor’s “adjusted” figure which filters pay gap numbers to achieve a more accurate “apples to apples” picture.

This takes into account factors including worker age, education, years of experience, occupation, industry, location, year, company and job title and reveals that the gender pay gap in base pay (not including bonuses) has fallen from 5.5% in 2016 to 5% last year.

Broken down in more detail, Glassdoor reveals that the 17.9% pay gap becomes 12.9% when bringing age, education and year of experience into the picture; 7% when sector and occupation are added; 5.8% when company specific controls are factored in and 5% after the job titles are introduced to the mix. The corresponding figures for total pay are 20.7% whittled down to 7.1%.

Overall, working on the assumption of the ONS unadjusted figure, women earn 82p for every £1 earned by men, an improvement on the 77p they earned in 2016.

Glassdoor chief economist and report co-author Dr Andrew Chamberlain described the progress as “slight”. He said: “Though a promising sign, it should not detract from the larger fact that significant pay gaps remain… even after controlling for workplace and other factors.”

He claimed that Glassdoor had shone a light on “where unexplained barriers continue to slow the march towards pay equality”.

The study also offered a detailed appraisal of eight other countries’ performance in narrowing the gap, including the US and France. It found that only Germany had failed to make any in-roads into closing gender pay disparities.

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Progress on the Gender Pay Gap: 2019 was based on 510,954 salary reports shared by employees between 1 January 2016 and 31 December 2018.

Organisations with 250 or more staff have until 30 March 2019 (public sector) or 4 April 2019 (private sector) to submit their gender pay gap information to the government.