What Corporates Should Do About the Gender Pay Gap

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What Corporates Should Do About the Gender Pay Gap | Future Business

What’s the Story?

Sainsbury’s 2021 report points out that some slightly oblique conditions can drive results. All its hourly paid store colleagues receive the same hourly rate – however stores in London attract a location premium.

Just under 40 per cent of its ethnically diverse colleagues work in stores that attract a location premium (i.e. inner and outer London), compared to just under six per cent of their white colleagues. Its median white and median ethnically diverse colleagues are both hourly paid store colleagues, so the location premium means the median ethnically diverse colleague has a higher hourly rate, therefore the median ethnicity gap is negative.

Your correspondent slightly struggled to initially understand this, but perhaps the point remains that variable conditions plainly do exist geographically and logistically across the UK.

Perhaps simpler to fathom is this; Sainsbury’s says there are more men in senior roles in its organisation. While it continues to see an improvement in female representation at senior levels, it still has more men in the most senior leadership levels and higher-paid roles, as well as more women in hourly paid positions.

These gender pay gap figures, it should be noted, include Sainsbury’s Bank. It directly employs in-store Travel Money Bureaux colleagues, which is structurally unique in the Financial Services industry.

Around 36 per cent of Sainsbury’s Bank colleagues work in hourly paid roles and just over 74 per cent of these roles are held by women. Hourly colleagues make up the vast majority of Sainsbury’s workforce. All hourly paid colleagues receive the same hourly rate, however, certain roles and locations attract a premium as aforementioned.

In roles that attract a premium such as online drivers and bakers, only 9.2 per cent of these are held by women. The logic here seems a little easier to follow.

Is Sainsbury’s alone?

In Shell Energy Retail, women earn 89p for every £1 that men earn when comparing median hourly pay. Their median hourly pay is 11.3 per cent lower than men’s; that’s a big difference from Sainsbury’s figures.

In Shell Energy Retail, women occupy 32.4 per cent of the highest paid jobs and 46.2 per cent of the lowest-paid jobs, another marked difference. Women earn 75p for every £1 that men earn when comparing median bonus pay. Their median bonus pay is 25 per cent lower than men’s.

Shell too offers specific reports and details on what is happening with gender pay. It says it was among the first FTSE 100 companies to publish ethnicity pay gap data and continues to use its voice externally to advocate for this to become mandatory, as part of a commitment to improving diversity representation and ensuring an inclusive workplace for all.

In 2021, says Shell, its gender pay gap moved in the right direction. There are more women in senior positions than last year. ‘But the change remains incremental, and we must do more.’

Again, some interesting elements underlie the numbers. Shell says that for 2021, its average gender pay gap was 17.8 per cent, an improvement from 18.0 per cent in 2020 and 18.7 per cent in 2019. This still seems slow progress.

Compared with 2020, it also saw a continued upward trend in the proportion of women in its upper pay quartile. However, compared with previous years, the proportion of men and women receiving a bonus decreased significantly. This is because the majority of Shell employees did not receive a bonus in 2021 due to financial challenges arising from the COVID-19 pandemic

Shell also notes there are almost three times as many men than women in the upper and upper-middle pay
quartiles. This is because, in the past, its industry has employed significantly more men than women,
and there have been low levels of staff turnover at Shell in the UK.

‘Although we reached our 2020 UK ambition of 30 per cent female senior leadership representation two years early (in 2018), there is still some way to go towards achieving our global aspirations of 35 per cent female senior leader representation by the end of 2025 and 40 per cent by 2030.’

The Future

The UK Government advises that businesses run a reputational risk if they fail to report and publish gender pay gap information. The thinking is that in many cases the suspicions behind why an employer failed to publish their gender pay gap could have a negative impact and be far worse than what would have been shown by the report.

The gender pay gap service, it should be noted, applies publicly visible ‘late badges’ to employers registered within the service that have failed to report and publish their gender pay gap information for any year they are required to do so.

It’s evident that today, rightfully so, gender pay gap issues are right on the corporate hit list. Reporting regulation is in place, and one hopes that the gaps and disparities between men and women will continue to lessen.

SEE ALSO: Building an Inclusive Culture that Passes the Test of Time

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