Close the Gap assessment of Scottish gender pay gap reporting suggests most employers are not planning to take action to close their pay gap

So, (most of) the results are in, and it’s not looking good. Close the Gap has done an assessment of gender pay gap reporting by Scottish employers. We looked at a cross-sectoral sample of 200 Scottish employers[1] across Scotland to get a more granular picture of the pay gap at the enterprise-level but importantly to identify what employers plan to do to close their pay gap. We used data published by organisations on the UK Government’s gender pay gap viewing service.

The headline findings from the assessment found:

• Extremely high gender pay gaps of up to 60% in male-dominated sectors such as construction, finance and oil and gas;
• Staggering gender gaps in bonuses of up to 607% in male-dominated sectors such as manufacturing, construction, energy and finance;
• Less than a third of employers have published a narrative which explains the causes of their pay gap, with many superficial in their analysis;
• Less than a fifth of employers have set out actions they will take to close the pay gap, with many actions unmeasurable and unlikely to create change; and
• Only 5% have set targets to reduce their pay gap.

Many employers explain their pay gap by glibly stating that it’s because more men are in senior roles and that is justification. That women are under-represented in the upper echelons of large companies is a critical problem, but also important is women’s persistent concentration in the lower-paid jobs in all organisations. A lack of quality part-time and flexible working means that many women who require to work part-time to accommodate their caring roles become boxed in, unable to progress into overwhelmingly inflexible senior roles, and end up working below their skill level. The under-utilisation of women’s skills is a drag on growth, contributing to sector-wide skills shortages. Research by Close the Gap established that equalising the gender gap in employment could add up to £17bn to Scotland’s economy.

Almost entirely missing from the current discussion of the pay gap is gender. Studies which have modelled the pay gap, including Close the Gap's recent modelling of Scotland's gender pay gap, has consistently found that gender itself is the largest contributing factor to the pay gap. This is most commonly explained as straight-up gender-discrimination in the labour market.

That less than a third of Scottish employers have set out an action plan for closing their pay gap is worrying but perhaps not surprising. It reaffirms our concerns about the limitations of the gender pay gap regulations. While we’ve welcomed the new pay transparency measures as an important first step in addressing the systemic inequality women face at work, the fundamental weakness is that employers aren’t required to take action that will close their pay gap. Evidence shows that most employers are unlikely to voluntarily take action on gender equality, predominantly because they unduly think they’re already treating all their staff fairly.

We know from the experience of the Scotland’s public sector that reporting alone doesn’t create change. Employers need to look beneath the headline figure, analyse their pay data, identify why there are differences and then set out the actions they’re going to take to solve the problem.

The challenge for employers is to decide whether to be sector leaders and demonstrate their commitment to gender equality, or to risk reputational damage by doing nothing.

We’re going to be using our findings to inform our work on the pay gap with employers and policymakers. We’ll also be continuing to support employers who are doing work to close their pay gap, primarily through our free online pay gap reporting tool, Close Your Pay Gap.

You can read a summary of the findings here.

The Gender Penalty: Close the Gap's new research on Scotland's gender pay gap

The current level of discussion around the pay gap is unprecedented as the deadline for large companies reporting their pay gap gets ever closer (just under two weeks to go, in case you wondered). At our conference in February, we launched our new research The Gender Penalty: Exploring the causes and solutions to Scotland’s gender pay gap.

The pay gap is a defining feature of Scotland’s labour market and although it’s very slowly narrowed over the longer term, progress has stalled in recent years. This is borne out as the pay gaps of well-known companies are hitting the headlines on a daily basis.

A range of studies have modelled the pay gap at a UK level, most notably the seminal work by Wendy Olsen and Sylvia Walby for the Equal Opportunities Commission. But there wasn’t any Scottish specific research on the factors driving Scotland’s pay gap. So Close the Gap commissioned University of Manchester to do an economic modelling of Scotland’s pay gap which would identify the causes, and look at how these have changed since 2004.

The research found that there are four main drivers of Scotland’s pay gap: bonus earnings, the size of company a woman works for, occupational segregation, and something called the “gender residual” which is most commonly attributed to gender discrimination in the labour market.

Perhaps most alarming is that there’s been no improvement in the causes since 2004, and the effects of most of the causes have actually worsened. Occupational segregation is seemingly an intractable problem, with no progress made. The effects of bonus earnings and company have tripled, while the effect of the gender residual has doubled, now costing women a staggering £3.15 per hour.

The new report also examines responses to the pay gap, and sets out what needs to change to advance equality for women at work. What’s clear is that existing approaches to the pay gap are failing to deliver change. Policy responses have been complicated by the devolution settlement whereby Scottish and UK Governments both hold powers for levering change. While employment and anti-discrimination law are reserved to Westminster, Holyrood has power over a wide range of policy domains that are instrinsic to closing the pay gap including early years, primary and secondary education, further and higher education, skills, economic development, employability, childcare, long-term care, the public sector equality duty and procurement.

There’s never been a cohesive, strategic approach to solving the problem which is why we’ve called for a national strategy to close Scotland’s pay gap. In its inquiry into the economic gains of closing the pay gap, the Scottish Parliament Economy, Jobs, and Fair Work Committee made the same call.

The pay gap is a structural problem which requires action from a wide range of stakeholders. We’ve therefore also made a wide range of recommendations in the report for key stakeholders including Scottish Government, the enterprise agencies, Skills Development Scotland, Education Scotland, employers and unions. The time for change is now.

Read the full report here.

Welcome to the pay gap

Close the Gap is proud to share this short animation on the causes of the gender pay gap, which we created with media co-op.

We know the gender pay gap goes far beyond the principle of equal pay for equal work, and responses to the pay gap must also take a bolder approach than simply focusing on the legal definition of equal pay. The causes of the gender pay gap include gender stereotyping, the undervaluation of women’s work, a lack of quality part-time and flexible work, exorbitant childcare costs, male-centric workplace cultures which feel exclusive to women, discrimination and more.

The gender pay gap is a structural problem, and requires a strategic, cohesive response to address its complex and inter-related causes. We are yet to see that in Scotland, or in the UK, and as a result progress on closing the pay gap has been glacial, with no substantive change in the everyday experiences of working women.

We hope this short film will help shed light on the causes of the pay gap, and encourage all stakeholders to take action. It’s up to all of us to close the gap.

Guest post: Young women and work

Written by Kirstin Gray, MSc Career Guidance and Development student at University of the West of Scotland.

We're very excited to have this guest post on our blog! Kirstin has recently completed a placement with Close the Gap, and we're really delighted to share her post on the pressures faced by young women entering the labour market, and the impact of gender stereotypes.

Young women and work

2018 is Scotland’s Year of Young People: one of its themes is Enterprise and Regeneration, celebrating young people’s role in the Scottish economy, and a second theme is Education. It also gives young people (aged 8-26) a chance to challenge the existing state of affairs, and therefore an exploration of young women’s experience in the labour market is warranted. At a time when Scotland wishes to celebrate young people it is pertinent young women’s voices are heard. My background is career guidance, more specifically labour market studies, with gender and inequalities at the forefront of my research interest. Armed with this background I write about women’s experiences in the labour market.

Sometimes you read something, and it stays with you. Sometimes it’s an intricate poem, a lyric in a song, a line in a journal or a snappy headline. A quote that has stayed with me comes from Work and Society by Strangleman and Warren, “…gender inequalities are structurally determined, not natural outcomes.” A concept I have been exposed to in my studies is whether or not we are individuated. We are not - we are socialised to act in a certain way, to conform and to maintain status quo in order that society can continue to function. From as early as the hunter-gatherers there have been gendered roles, an expectation that women and men should perform certain duties because of their sex. It is ingrained in society, and in the labour market women have been negatively impacted by this through occupational segregation, devalued work, invisible work, precarious employment and poor mental health. These are some of the issues that will be touched on in this blog.

Girls outperform boys in education, and in 2012/13 44.1% of girls achieved at least five awards at level 5 compared with 34.8% of boys. Despite this women are less likely to be in work than men, and those women who are in work are less likely to be in senior positions and more likely to be in part-time work. Occupational segregation begins in education where girls are less likely to pick STEM subjects, which are interdisciplinary subjects that underpin many top paid jobs. YWCA Scotland research discusses how women are not only discouraged, but also prevented from selecting subjects which are deemed to be “for” boys or men. This research also shows women are concerned about the impact of having children on their career, and feel they are not represented in the labour market on a senior and decision-making level.

It is often asserted that women choose jobs based on other advantages not concerning salary, such as convenience of the job. The truth is, women’s work has been routinely devalued, for example clerical, care and cleaning, and although these jobs are fundamental to society the salary for such jobs is extremely low. There is a common perception that women’s “choices” create the gender pay gap, including; taking a career break to have children, working part time and the type of work women do. The problem with this statement is that the causes that lead to the pay gap are described as free choices instead of structural constraints that have an impact on women in the labour market: discrimination, lack of flexibility, the glass ceiling, and pregnancy and maternity discrimination. Furthermore this idea assumes that women freely choose to do work in the home and care, rather than it being an expectation due to historical gender roles.

Young women’s experience of the labour market is entirely different to their male counterparts, in a labour market which is becomingly increasingly difficult to navigate. Precarious employment is filling the unemployment gap, and while it looks good for governments there is widespread in-work poverty due to low wages. Importantly, women experience a more complex and problematic situation. Recent research honed in on the emotional journeys of young women in the labour market and showed young women feeling increasingly more anxious, with self-esteem decreasing. This is despite young women outperforming young men academically.

This is where precarious employment comes into play. Precarious employment, including temporary contracts and low or zero hour contracts, is inherent in our society. It has become a norm, and a scroll through some job adverts sees the “benefits” of such modes of employment described as flexible working. This type of insecure work puts immense pressure on the employee. How do women fit in? Women are more likely to be in the industries that fall victim to precarious employment; catering, retail, care and clerical work to name a few. The socialisation of young girls influences their journey through education and choice of certain subjects. A sense of identity is interlinked with career maturity, and if that sense of self is socialised by gender roles it is no wonder that these processes repeat themselves and the pay gap remains.

Why does women’s greater academic performance lead to such dire results in employment? Society’s expectation of the role women should have in the labour market plays the most significant factor. Research from the Institute of Physics gives an insight into this: “87% of girls asked (aged 11-21) think women are judged more for their looks than ability.” The rise of 'aesthetic labour' suggests that in some areas of employment, such as retail, image has become an important factor to employers in choosing a candidate for a job. Instead of merit, therefore, it becomes who looks the best for the job. Gendered roles reinforce and amplify this.