A leading law firm has warned that compulsory gender pay gap reporting is not a ‘quick fix’ for organisations which are struggling with the issue.

According to the female-led law firm Prettys, eliminating the problem in the UK’s workplaces will only happen if employers start to recognise the structural and cultural issues that also need to be tackled.

A recent report found that despite firms now legally having to disclose information on the pay difference between their male and female staff, the gap between salaries in the public sector has actually widened.

Family friendly working policies

With new employment law regulations coming into force from April 6 and with Equal Pay Day taking place this week, firms need to shine a spotlight on their practices, says the Ipswich based practice.

Women can often lag behind male colleagues in earning power because of a number of factors, said Matthew Cole, employment partner at Prettys.

“Perhaps the main reason there is a pay gap is the fact that workplaces have still not made the necessary adjustments to allow women to pick up their careers effectively following a break for maternity leave, or to bring up children,” he said.

“Whilst employers are making increasing efforts to put into place family-friendly working policies, many of these will take years to bear fruit, and the attitude among many employers has not yet shifted far enough.”

Since last year companies with 250 or more employees have had to report their gender pay gaps at the end of their financial year (March 30 for public sector organisations).

The reporting looks at the overall pay gap in an organisation. It is different to equal pay which looks at employers paying men and women differently for performing the same role or ‘work of equal value’ and which is legally enforceable.

Shared Parental Leave

While Shared Parental Leave (SPL) and Statutory Shared Parental Pay have been in effect since 2015, Matthew added that from his experience women are still taking far more leave than men.

But he added that it is not just about maternity leave: “Clearly the pattern of flexible working to support childcare and similar responsibilities is evidence that women undertake the large majority of caring responsibilities outside the workplace, and this seems to inhibit career progression for women.

“In our experience SPL is hardly ever taken up by men. There are many reasons why this could be, including society’s expectations or that men do not actually want the time off, choosing instead to disrupt just one career instead of two.” 

He added: “There are also other, cultural issues, which are only just gaining more mainstream attention. There is evidence that men may over-value their worth, whilst women under-value their contribution. This means that men may push harder for career and pay progression, when compared to an equally (or more) competent woman.”

 And he concluded: “I think the pay gap will only be narrowed over a very long period of time by changing employment practices and attitudes.”

Vanessa Bell, partner and Prettys’ head of employment, warned that while there may be no legal implications as long as the pay gap is reported properly, a significant difference between earnings could impact future recruitment.

“I think decision-makers have to look at the gender pay gap from a business perspective, not just out of a sense of legal or moral duty,” she said.

“It’s all well and good a business revealing its pay gap, but if these businesses don’t take action to address it, they could lose out on recruiting or retaining good staff.

 “Talented women may disregard the company and choose not to apply for vacancies based on a perception – that may be misguided – that women are not valued in the business.”

The Government is currently looking at other areas of concern over equality in the workplace, such as pay gap reporting in regard to race, Matthew explained.

“It is currently just a proposal but is proving controversial as a lot depends on a person’s self-identification of what their race is.”

And he added: “There will be more categories than simply male or female, but we are already seeing some isolated examples of voluntary reporting.

“And if you’re looking at race, why not look at pay gaps with other things such as sexual orientation and age? There is still plenty to think about.”

Prettys announced on 1 April, that it now has five female partners following the promotion of two key members of the team and a further external appointment that day. It currently has three male partners.

A widening pay gap

According to BBC analysis of the latest figures, the gender pay gap has widened in favour of men at nearly half of the UK’s biggest employers over the past year.  78% of companies had a pay gap in favour of men, 14% favoured women and the rest reported no difference. Overall, the median pay gap in favour of men lowered slightly from 9.7% last year to 9.6% this year.

A tech view

Commenting on the reported figures from a tech firm perspective, Tara O’Sullivan, CMO at Skillsoft, said: “The only way we’re going to solve this issue is with more reporting.  It acts as a benchmark for the entire organisation.  If a company is paying women less than it’s paying men, what else is going wrong behind the scenes?  

“There is definitely a mismatch with the size of these organisations. Often, with so much focus on accountability, it’s far easier for women to get a job in a large company. For smaller businesses it’s still a major problem. Even if we’re not going to regulate pay gap reporting in small businesses, we need to at least make sure they can demonstrate equal opportunities. Blinding yourself to 50% of the talent pool is a poor business decision, but we know many small companies do it. Unfortunately, we also know that we’ll need to name and shame organisations to effect any real change.”