Energy companies embrace STEM challenge to tackle gender pay gap

Out-Law Analysis | 12 Nov 2018 | 4:20 pm | 4 min. read

ANALYSIS: Energy companies operating in the UK are embracing the challenge of encouraging more women into careers in science, technology, engineering and maths (STEM) as a long-term solution to reducing their gender pay gap (GPG).

Details of the STEM related initiatives which businesses in the energy sector are involved in have been shared by energy companies in their GPG reports. Women are under-represented in the energy sector and in particular in senior roles which is one of the reasons why women working for energy companies in the UK earn less than men on average.

The gender pay gap in the energy sector

In the UK the GPG 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 GPG regulations require employers to publish their overall mean and median pay gaps based on gross hourly pay for men and women and also their mean and median gender bonus pay gaps. Employers 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. The figures are all expressed as a percentage. GPG information must be reported annually.

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

The first deadline for reporting passed on 4 April 2018 and applied to GPG information as at 5 April 2017.

More than 120 employers across the 'electricity gas steam and air conditioning supply' and 'mining and quarrying' sectors reported their GPG data. The median GPG of 16% for the electricity and gas sector was the fifth largest GPG recorded for any sector in the UK.

Data published by energy companies showed a mix of results, with median GPGs ranging from above 30% in some cases to under 10% in others. Southern Gas Networks even reported that women are paid on average 1.3% more than men.

The next reporting period applies to employers' GPG position as at 5 April 2018 and must be reported by 4 April 2019.

Factors behind the gap

There is a significant shortage of women with STEM skills which hinders the recruitment process. This has not been an industry that has traditionally attracted high numbers of women resulting in  women often being underrepresented in the energy sector. Additionally, higher percentages of bonuses are often paid to male employees who often work in the most technical roles which command a premium within the energy sector.

Many organisations in the energy sector operate 24/7. For this reason, roles often include unsocial hours or offshore work, often on rotation, which carries significant compensatory allowances. These types of working patterns are often less attractive to women who often seek to benefit from flexible working patterns.

The GPG data for the sector has also been shaped by the fact the GPG regulations require employers to include one-off payments made in the corresponding 12 month period. This requirement caught companies, including those in the energy sector, who made non-consolidated payments to employees as part of a collectively bargained pay agreement.

Action being taken

No single solution can address the GPG that exists in the energy sector in the short term. However, the GPG reports submitted by companies detail a range of measures being taken to ensure employee remuneration is fair and to encourage women into roles in the industry which will hopefully lower the GPG in the long term.

Examples of measures taken include: regular reviews of pay levels and practices through annual equal pay reviews and benchmarking exercises; introduction of agile working arrangements; and implementing maternity and adoption packages that go beyond the minimum statutory requirements.

Other steps being taken are initiatives such as the provision of unconscious bias training for staff, the use of gender-balanced shortlists in the recruitment process, the development of a balanced talent pipeline through succession planning and investment in mentoring, coaching and sponsorship of high potential employees returning to work after an extended period of absence.

A widespread commitment from industry to develop the technical talent pool within the energy sector by investing in STEM education was also evidenced in the GPG reports.

For example, BP's GPG report highlighted its involvement in the Enterprising Science research partnership. This is a five year partnership between BP, the Science Museum, University College London and Kings College London. This project uses the concept of science capital – a science related qualifications, interest, literacy and social contacts – to understand how young people engage with science and find out how best to support such engagement.

Various other initiatives have been launched to inspire girls to pursue STEM careers. As part of these initiatives, companies are arranging for staff to attend schools to talk about engineering roles, apprenticeships and graduate schemes. In addition, EDF Energy launched its 'Pretty Curious' programme to encourage young women to pursue a career in STEM. Their cinema advert has featured in film viewings with over 27 million admissions.

It is encouraging that businesses in the energy sector recognise the need to attract more women to consider pursing careers in STEM. Doing so will help expand the pool of talent that companies currently have access to and in tandem with other positive steps being taken, for example the introduction of agile working arrangements,  can help energy companies reduce the GPG in the sector over time.

Fiona MacLellan is an employment law expert at Pinsent Masons, the law firm behind Out-Law.com.