What small businesses need to know about the gender pay gap

Kate Palmer reveals what small businesses need to know about a critical issue in today's workplace: the gender pay gap.

New analysis of the gender pay gap has revealed that women are paid less than men at every stage of their working life but the gap is widest during their 50s; women earn £85,040 less than men during this decade. From 2018, larger businesses, those with 250 or more employees, are required to report on their gender pay information. This requirement is not applicable to small businesses but there are steps they can take to reduce the gap.

The gender pay gap is, essentially, the difference between men’s and women’s average full-time earnings calculated on an hourly or weekly basis. For full-time workers the current gap is 9.4 per cent meaning a full time female employee earns an average of 9.4 per cent less pay than a full-time male employee.

Removing the gender pay gap within a company might be as straightforward as it seems because there are complex reasons for the gap such as women taking jobs which are more likely to be lower paid or working fewer hours because of childcare commitments. However, there are simple steps employers can take to aim to reduce the gap in their business.

The first step is to carry out a review of the job roles in the business, who carries out the roles and the rates of pay. It will often be the case that there are different pay levels across the business so the next step is to ascertain the reason for the difference. Is it because the job roles require different skills and qualifications or is it because they have different levels of decisionmaking and responsibility? If there isn’t a genuine reason for the difference in pay, employers will have to examine if the difference is because one person doing the role is male and the other is female. If this is the case, this is likely to breach discrimination laws and will contribute to the gender pay gap.

Employers should also examine if there is subconscious discrimination taking place in their business. Although treating employees differently because of their gender is outlawed, this may not always mean that managers do not take sex in to account when they are making a decision, whether consciously or subconsciously. To remove the risk of subconscious discrimination, employers should scrutinise recruitment, promotion and training practices to ensure these offer equal opportunities to both male and female employees and retrain managers in charge of these.

Although the gender pay focus is often on women, employers can consider the opportunities available to men, such as flexible working and rates of pay for family friendly leave. Offering equal rights to men through these initiatives will allow them to contribute equally towards family life and, in turn, ensure women have an equal opportunity to attend work and earn a full-time salary if they choose this.

Kate Palmer is head of advisory at Peninsula

Further reading on legal issues

Kate Palmer

Kate Palmer

Kate Palmer is a Chartered Fellow of the CIPD and HR Advice & Consultancy Director at Peninsula UK.

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