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 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.
The widely reported extreme pay gaps of many household name companies have been a surprise to many. For Close the Gap, it’s easy to see how women’s systemic inequality in the workplace manifests in such headline grabbing soundbites. Evidence shows that most employers haven’t done an equal pay review, and those that have been done are usually of poor quality. Discrimination in embedded in the design of pay systems and practice. This is particularly the case for discretionary pay practice, such as the awarding of bonuses, which is highly vulnerable to discrimination.
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 writing up our findings and using them 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.
 UK Government estimates that there are around 700 Scottish private and third sector organisations required to report their gender pay gap information.