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Out-Law Analysis 5 min. read

'Male-dominated' construction industry reports highest pay gap

ANALYSIS: Recruitment and representation of women in the construction industry has historically been a challenge, and is reflected in the high gender pay gap (GPG) figures reported by businesses in this sector.

Construction firms caught by the GPG reporting requirements recorded the highest median gender pay gap amongst reporting sectors: 24%; just above the 22.5% gap reported by the finance and insurance sector, and the 21% gap reported in the education sector.

Unsurprisingly, those companies that chose to include an explanatory narrative alongside their figures revealed that they were male-dominated at all levels, with a particular lack of female representation in the top, upper and middle pay quartiles. The proportion of women, including women in administrative roles, in the lower-paid quartiles was higher.

For construction companies, taking action to improve representation of women within the wider sector will be vital to tackling the gender pay gap. There have been general efforts to raise awareness of the issue via industry-specific campaigns, and through action to actively promote the 'STEM' subjects (science, technology, engineering and mathematics) in schools. Firms have also committed to reviewing their recruitment processes to ensure that they are gender-neutral, and to mentoring and career development initiatives for female staff.

The GPG reporting requirements

The gender pay gap reporting regulations apply to private and voluntary sector employers with 250 or more employees. Public sector employers are subject to a similar duty under separate legislation.

The regulations require employers to publish their overall mean and median pay gaps based on gross hourly pay for men and women, expressed as a percentage; as well as their mean and median gender bonus gaps. They are also required to publish the proportion of male and female employees within each 'quartile' of their pay distribution, ordered from lowest to highest pay, as well as the proportion of both men and women that have been paid a bonus in the preceding 12-month period.

GPG information must be reported annually. The first reports had to cover GPG information as at 5 April 2017, and had to be reported by 4 April 2018. The Government Equalities Office recently confirmed that all of the UK employers considered to be in scope of the regulations had published the required data. The next reporting period applies to employers' GPG position as at 5 April 2018 and must be reported by 4 April 2019.

Employers are required to publish the information on their own websites, and also submit it to a portal set up for centralising the data by the government. The data displayed on the government portal is standardised. However, employers can provide a link to more detailed narrative information on their own website. Employers therefore have an opportunity to contextualise the data and set out action plans to tackle any problem areas.

The GPG in the construction sector

A total of 363 employers have reported their GPG data within the 'construction' sector on the government's reporting portal, with an average median gap of 24%. Commentators have reported that the top ten biggest UK construction firms as ranked by Building's 2017 top 150 league table have a combined median pay gap of 25%.

Each separate legal entity was required to report their statistics, which has led to some anomalies. For example, one legal entity within a wider construction group reported a 59.6% median pay gap, against a 27.7% gap elsewhere in the group. Some corporate groups voluntarily chose to report combined figures for the entire group as part of their wider narrative reporting.

Bonus statistics are thought to amplify the GPG within the construction sector. This is because bonuses tended to be paid on a per-project basis, and be paid to delivery teams made up of an overwhelmingly high number of male employees.

Overtime rates are excluded from the official calculations. These rates could vary depending on the project in question and could potentially muddle the picture further. It is possible that, had overtime payments been included, the reported gaps could have been much higher as overtime work is more likely to be undertaken by male employees. Again, the reason for this is that women within the construction sector are more likely to work in administrative roles rather than on projects.

What are construction companies doing to tackle the GPG?

Representation of women in construction has historically been a challenge, with many companies in the industry having a disproportionately low number of female employees particularly at the higher levels. Reports published by Randstad, a recruitment agency, have shown that women are three times more likely to miss out on promotion and of the 5,500 construction workers and 540 employers who took part in the survey, 49% had never worked with a female manager.

One of the biggest issues is attracting women to the construction industry in the first place. It is well-recognised that there is a lack of women with STEM skills: only 24% of STEM graduates in 2017 were female and, of those, only 14% were in technology and engineering.

Many construction companies are taking steps to actively promote STEM subjects in schools particularly at the primary level, as research has shown that by the age of 16 only 35% of girls elect to study mathematics, physics, computing or a vocational qualification. Balfour Beatty has formed partnerships with education providers to encourage young girls to pursue a career in the construction industry, while Amey has launched a STEM ambassador scheme whereby ambassadors from the business will visit schools and colleges throughout the UK to inspire girls to work towards a career in engineering.

Companies including Amey, BAM Nuttall, Costain and Sir Robert McAlpine have signed up to the WISE Ten Steps campaign. This is an industry-led campaign to ensure that women in STEM have the same opportunities to progress in their careers as their male counterparts. The Construction Leadership Council has also been working to transform the image of the construction sector as male-dominated, and to inspire more women to pursue careers in construction.

A big area of focus for companies is on reviewing recruitment processes to ensure that they are gender-neutral. For example, Kier reported a focus on increasing its intake of female employees, with the aim of establishing a 70:30 ratio of male to female employees at graduate level within the company. Interserve has implemented a system of diverse recruitment shortlists, and it also tracks gender balance in its headcount data.

Companies have developed targeted career development initiatives for women, to help them realise their full potential and increase the numbers of women at all levels of the business. Some companies have reported a particular focus on increasing the number of female employees in technical and operational roles. Mentoring initiatives to drive female progression have also been proposed, including Balfour Beatty's innovative 'reverse mentoring' programme with the aim of ensuring that company leaders are aware of and understand the needs of women and other underrepresented groups within the business. Many companies are also introducing mandatory unconscious bias training, particularly in management training courses.

Return to work initiatives will help women who have taken career breaks and support their return to work, while implementing agile working arrangements and encouraging employees to adjust their work patterns to better suit their needs can be used to support staff at all levels with family and other commitments. Costain's report revealed that it is more visibly promoting flexible working for all its employees, not just female staff; while Morgan Sindall has introduced enhanced maternity policies to help support returning women and Laing O'Rourke is planning to launch a 'returner' programme in 2018-19 and also continuing to promote 'Keep in Touch' days for employees on shared parental leave.

It is widely accepted that none of these initiatives will achieve a quick fix to the problem of under-representation of females in the construction industry but assuming they are properly targeted, they should promote sustained progress over time. 

Susannah Donaldson is a gender pay gap reporting expert at Pinsent Masons, the law firm behind Out-Law.com.

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