Mind The Gap

On 1st of October, gender pay gap regulations will be enforced: meaning that you as an employer have 6 months to start gathering preliminary numbers to submit your first 'data snapshot' of the existing gender pay gap in your firm. This article aims to help you contextualize the pay gap, understand reporting requirements and will discuss some of the implications.

By 2018, Gender Pay Gap (GPG) Reporting will become mandatory. In an effort to achieve gender pay parity, the UK government are stepping in. New regulations introduced under Section 78 of the  Equality Act 2010 will require all major employers (including voluntary and private sectors) to report GPG information.  In an effort to "end the gender pay gap in a generation", an ambitious goal put forward by David Cameron during his term as Prime Minister, the introduction of GPG reporting along with the introduction of the National Living Wage in April (currently set at £7.20) and setting a target for FTSE 100 companies to have a minimum of 25% female representation at board level (aiming for 33.33% by 2020) are some of the steps that have been taken in the UK that have resulted in what Lord Mervyn Davies terms as a 'near-revolution' sparked by 'profound culture change at the heart of British business' that wouldn't be possible without setting realizable targets at a legislative level. 

Key Dates: 

1 October 2016: GPG Regulations for public bodies in force. 

Early 2017: GPG Regulations for voluntary/private sectors in force.

4th April 2017: Deadline for preliminary data 'snapshot' to be completed. 

4th April 2018: Deadline for publicly reporting GPG information on own website and to the Government's reporting website. Commentary is not required, but encouraged. 

Despite the gender pay gap presently being reported as lowest on record to date, Justine Greening, the incumbent Minister for Women & Equalities (who since the constituency shake-up is currently fighting to keep her seat) says we cannot get complacent, 

"There are still many glass ceilings here in Britain to smash."

The World Economic Forum rank the UK in the Global Gender Gap report 18th out of 145 countries (i.e. 0.758/1), behind Rwanda, South Africa, Nicaragua and the Philippines. In the UK, labour force participation is equal, yet wage equality for similar work is given an estimated ratio of 0.66 - i.e. comparatively, women work for free for a third of a year.  For a service-driven, developed country with the fifth largest economy in the world - where male and female literacy rates are identical and an extraordinary 13% more women are graduating from university compared to men, even among total graduating students in undergrad science subjects (12,070 more females graduated with STEM degrees in 2015) -  the UK can no longer afford to allow a pay gap to inhibit the success of their women or justify the under-representation of women in leadership positions. 

The fact that women make up only 4% of deal-making venture capitalists and that we are seeing fewer women opting in to computer science degrees than we did 10 years ago, is going to make it particularly difficult for the tech sector to balance gender ratios and pay differentials; and will force government to look deeper into the gender imbalance within this industry and possibly take tougher measures to see change.  

How will Gender Pay Gap Reporting help to close the Gender Pay Gap? 

GPG reporting is a positive step toward ending gender inequality in the workplace in the UK by encouraging increased transparency. Increased transparency has been highlighted as the key factor preventing employers from taking necessary steps to close the gender pay gap.  In response to a government survey, Virgin Money stated that increased transparency in gender pay differences would have the potential to "act as a catalyst for individual firms and sectors to review policies and practices that may hold women back from progressing in their careers and introduce training to address unconscious bias amongst recruiters and line managers".  

The initiative titled, Think, Act, Report has tasked companies to pledge to identify gender equality problem areas, take action to fix them and report on how their business is encouraging and ensuring gender parity. By signing up, companies are able to establish themselves as thought leaders of gender equality by publicising their commitment to the mission by adding the Think, Act, Report logo to their website. In doing so, not only will they be encouraging other employers to support best practice but they will also be better able to recruit and retain top talent irrespective of gender.  Companies that rely heavily on technologists that have signed Think, Act, Report include Standard Chartered, SKY, Capgemini, Fujitsu, Microsoft, BAE Systems, Dell, IBM, and Sage (and are to a large extent those companies that tend to support/sponsor diversity and networking events for women). A host of companies that signed pay gap review pledges similar to that of Think, Act, Report abroad include top tech firms such as Amazon, Spotify, Airbnb, Pinterest. 

What is this telling us? Companies want to see both the women in their firms reach their potential; and they are not underestimating the power of perception when it comes to recruiting top talent. A recent survey of 1,000 private sector employees showed that an overwhelming majority (91%) feel GPG figures alongside remedial steps/a strategy to tackle the gender gap is something they expect their employers to discuss with them.  Numerous events that SheCanCode's team have attended has highlighted this point: in order to attract a more diverse workforce, you need to highlight that you are an equal employer actively seeking to diversify your workforce, adopting policies to action that desire and embracing a corporate culture that nurtures and supports diverse candidates. 

So what is the GPG in tech? 

Across all jobs in tech, females are earning less than men; and often as much as 37% less than men in jobs such as data processing. As depicted below, female software engineers earn on average around 22% less than men for the same work. This gap does however appear to be negligible in the first 2 years' of programmers' careers where women often earn up to 2% more than men for the same work. While one could argue the decreasing rate of female participation in technology is the reason for the staggering wage gap (particularly when looking at median annual earnings across seniority and occupations), as fewer women are both entering and remaining in the tech sector, leaving predominantly men in senior positions and old boys' networks sustaining the gender imbalance; it is clear that there has never been a better time to promote increased transparency that may demystify the real wage gap within this sector rather than to further discourage women from entering the industry based on assumptions that have yet to be accurately tested. 

In saying that, there has also never been as much of a drive to expose young women to consider a career in technology nor to inspire those already in the industry to remain as there is today.  From events specifically aimed at 'women in tech', to mentorship programs as well as courses and programmes that teach women how to code; in addition to schools' introduction of mandatory computing classes, there is reason to believe that the number of women opting to pursue technology as a career is on the up. 

Worryingly though, Researchers at Cornell University found that in male-dominated industries such as technology, as women enter the industry in greater numbers, pay tends to decline.  What this means, for example, is that as more women become programmers, the pay for programmers will drop (compared to when there were fewer women in this occupation).  We have all seen this in practice: HR managers (mostly women) earning 27% less than IT managers (mostly men); housecleaners (mostly women) earning 22% less than janitors (mostly men).  The prior examples show the discrepancies in positions where the jobs require similar education and skillsets, yet are divided by gender.  

Paula England, NYU sociology professor describes "gender bias sneak[ing] into [hiring] decisions," whereby we subconsciously decide that once a woman assumes the job, its impact on the bottom line and skill required is less important. In today's economy, computer scientists are among the most highly paid professionals. Oxbridge grads are reported to earn on average around £43,895 within 6 months of graduation (higher than any other occupation).  While this may have something to do with the high demand for top technical talent, if you've seen the Imitation Game or have read about the history of computer programming, you'd recall it was originally seen as a menial task done mostly by women.  Over the last 50 years, as men have come to outnumber women in computer programming, the occupation has not only gained status and prestige but has also started to pay significantly more.  

The hope is that GPG reporting will bring about increased transparency and eliminate the gender pay gap within the next decade; however, there are plenty of hurdles that need to be overcome to realise this ambition.  For male-dominated industries such as tech, it will require us to look further than pay differentials.  

Keep a look out for our next article which will tell you all you need to know about GPG Reporting and answer FAQs. If there is something you need to know, why not tell us.

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