Gender pay gap data highlights need for ‘granular’ approach to fix persistent issues

Businesses operating in the UK’s energy sector should look at how they can use their gender pay gap data as a catalyst for change in their business. Many firms in the sector have taken positive steps to reduce the gap but deep-rooted issues persist which are a barrier to attracting and retaining women in the sector. That is the conclusion drawn from data analysis conducted by Pinsent Masons. We’ll speak to one of the lawyers who is currently working on this with a number of clients in this sector. 

The issue is highlighted in an Out-Law piece by the Equality Law Team and D&I consultancy Brook Graham and comes on the back of the recent ONS report reviewing the gender pay gap data from 2023 for Great Britain. The data shows the gap has barely changed in the 12 months to April 2023. The ONS report is covered by Personnel Today which carries the message that firms are not doing enough and that, as a result, they are losing the war for talent. 

That is particularly true of the energy sector. Analysis by Pinsent Masons has found that approximately 64 employers in the energy sector have reported their gender pay gap via the government portal for the latest reporting year, 2022-23. This is lower than other sectors and down on equivalent figures in the sector from the previous year. In the case of large energy companies that have reported, women working for those companies are paid on average approximately 15.5% less per hour than men. This is roughly on par with other industries and sectors. Overall, however, there is on average an 18.9% difference in the median bonus payments to men and women across the sector, which does not compare favourably to most other sectors.

The conclusion drawn in the Out-Law piece is that, yes, most large firms are gathering the data and reporting on it, but they’re not using it to fix their problems. So, if employers want to see real improvement going forward they are going to need to focus on a detailed analysis of where their key problem areas lie and offer targeted initiatives to try and address those areas. 

So, let’s speak to a lawyer involved in helping clients with this. Earlier, Lesley Finlayson joined me by video-link from Glasgow to discuss it. Lesley is involved in preparing the calculations and undertaking analysis for clients before reverting back to the client. I asked her to outline the process: 

Lesley Finlayson: “So when a client wants to look at their gender pay gap calculations they can send their data  through to us and, in the simplest sense, they'd be sending us their employees’ hourly rate of pay and their bonus and we can produce the gender pay gap calculations. What we can offer is much more analysis on that data so that it's of more value to the clients and really what that would be doing is looking at additional factors in relation to each employee. So, for example, we could look at things like the location where the employee is based, their job role, if there's a grading structure, the age range that they are in, and we can then produce pay gap calculations based on those factors. We’ve found that's really helping our clients to then look at where they may have problems and to do that deeper dive analysis on any kind of problem areas.”

Joe Glavina: “One of the examples covered in the Out-Law piece, Lesley, is around flexible working and how the data can help in flagging up an issue which the client may have missed, or they’ve assumed wasn’t a problem”

Lesley Finlayson: “Yes, that's exactly right, and flexibility is definitely one of the key things that we are seeing coming up with clients. So, to give you an example from the energy sector, we had a client who was finding a persistent problem in trying to reduce their pay gap. We had identified that flexibility might be an issue whereas they felt they had put flexible working measures in place. What we did was look at the factors that were influencing the gender balance, for example, in offshore workers, or workers doing unsociable hours. What we found is that males preferred, or were more likely to do those roles rather than females and, actually, that was an underlying cause of their gender pay gap and it did suggest that, perhaps, they needed to look again at the support, the policies and procedures they had in place to see if there's anything that they could do with that to try and encourage more females, or to encourage a better gender balance, to do those kinds of roles because those roles will attract more pay, ultimately, which will then, obviously, improve the gender pay gap if we can get more women into those higher paid roles.”

Joe Glavina: “Can we talk about how the lawyers in the Equality Law Team work with the consultants in Brook Graham on this because, as I understand it, the two work closely. You’re in the Equality Law Team, Lesley, aren’t you?”

Lesley Finlayson: “Yes, that's right. I’m in the Equality Law Team but, as you say, we work very closely with Brook Graham on the diversity and inclusion aspect. So, how that would work is, once we've done this kind of better, granular, analysis and we've looked at some of the factors, then if the client wants to look deeper into that and say, well, how can we improve these factors we might come around to looking at things like is there any inbuilt biases in, for example, the application process, or recruitment or retention, or their bonus policies, all these kinds of things. That’s where Brook Graham can then feed in and advise on what might be underlying. Another example would be we worked with a client recently who found that location was a big factor that was contributing to their gender pay gap and they weren't sure why it is that if you're based in a certain location the gender pay gap was higher. So that was a case where we offered the service to look more closely at what was going on there, and also maybe the cultural aspects that might be affecting that in that area.”

Joe Glavina: “So in summary, Lesley, you’re saying the exercise of gathering the data and reporting on it isn’t enough to help the business? In essence, that is your key point?” 

Lesley Finlayson: “Yes, that’s exactly what we are saying because I think when gender pay gap reforms were introduced, clients obviously put in place various measures but now they’ve had those easy wins and so now what we're finding is they really do need to look in more detail, again, at whether these policies are actually working. So, for example, I mentioned the flexible working policy – is there more that can be done? So they do need to do that more detailed analysis if they really do want to drive forward and having a reducing pay gap each year.”

If you’d like to read more about this then we suggest you take a look at the Out-Law analysis piece by the Equality Law Team’s Susi Donaldson, and Brook Graham’s Kieron O’Reilly. That’s ‘Gender pay gap data can be catalyst for change in UK energy sector’ and we’ve put a link to it in the transcript of this programme.

LINKS
- Link to Out-Law article: ‘Gender pay gap data can be catalyst for change in UK energy sector’