Out-Law Analysis 4 min. read
17 Nov 2023, 10:25 am
Businesses operating in the UK energy sector should consider how they can use their gender pay gap (GPG) data as a catalyst for change in their organisation.
Analysis undertaken by Pinsent Masons has found that many businesses in the sector are already taking positive action to reduce the disparity between what men and women are paid. However, deep-rooted issues persist around attracting more women to work in the sector – and in supporting those in jobs already into more senior roles. This is reflected in the latest GPG data that is available.
The GPG reporting regulations, introduced in 2017, require employers in Great Britain with 250 or more employees 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.
Companies caught by the regulations must also 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 than have been paid a bonus in the preceding 12-month period.
Businesses reporting their GPG data are encouraged, but not mandated, to publish a narrative alongside the raw data to provide some context for it and explain the steps they are taking within their own organisation to address any disparity found between men and women’s pay.
Analysis by Pinsent Masons has found that approximately 64 employers in the energy sector have reported their GPG 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.
Many [energy] businesses … are already taking positive action to reduce the disparity between what men and women are paid. However, deep-rooted issues persist around attracting more women to work in the sector – and in supporting those in jobs already into more senior roles
Since reporting obligations have been in effect, there has been mixed progress towards addressing the GPG in the energy sector. Several companies have improved their GPG by a relatively modest one or two percentage points, while others have been able to improve the position by more than five percentage points. At many other companies, however, the GPG has remained pretty similar across the years and in some cases there is evidence that the position has regressed.
It is widely recognised that there is a shortage of women working in the STEM sectors, and whilst efforts are being made at recruitment stage to balance this, this is yet to have a significant impact. The issue is particularly acute in respect of more senior positions, of which men continue to hold the majority.
These issues are well acknowledged within the energy sector, and oil and gas industry especially, where approximately only one third of entry level employees are female – less than that across other STEM sectors.
Currently, it is often the case that more men are in higher paid technical roles across the energy sector, whereas a greater proportion of women work in customer service and administration roles, which are typically lower paid. Traditionally, more women work in part-time or flexible roles than men too. This can affect bonus payments.
Job-specific factors are also relevant to the cause of the pay gap in the energy sector. More men typically earn additional call out and unsocial hour allowances compared to women. This is particularly the case within oil and gas, where offshore workers – the majority of whom are male – earn offshore allowances, travel allowances, and other additional payments to reflect the rotational working pattern.
The most common actions taken by employers in the energy sector to close the gender pay gap include promoting dedicated leadership programmes, introducing STEM activities, operating mentoring schemes, and setting diversity targets. These actions were some of the most prevalent in companies that have managed to reduce their GPG by at least 25% since 2017.
Family-friendly policies, such as enabling hybrid working and offering support to employees on maternity leave, are also popular in the sector.
Some energy companies are implementing ‘blind screening’ of CVs for job applications. The idea of this is to remove a candidate’s name and other identifying factors such as address, which university they attended, and their age. This promotes objective decision-making by hiring managers absent any factors such as gender, race, or socio-economic background that could influence their choice. This is one of the main steps energy companies are using in their recruitment practices to reduce their GPG.
Candidate experience surveys are also being used by some companies to collect data on the recruitment experience and monitor on-going changes.
Companies in the energy sector are also focusing efforts on addressing the GPG even before the recruitment stage. This includes through educating school children and encouraging more young girls to think about jobs in the energy sector. At National Grid’s North Sea Link interconnector site, for example, an education centre has been opened with a view to pique the interest in of children in the future of energy. Local school children can visit and learn about the interconnectors, and their importance to delivering net zero emissions in the UK.
ScottishPower has also enhanced its STEM in education programme with the aim of engaging with thousands of school age children, while TotalEnergies similarly aims to encourage more children and young people to study STEM subjects at school by sponsoring and supporting projects that focus on such topics – the company, among other things, implements an early careers programme for graduates and apprentices and sponsors and supports STEM-based projects in and for schools across the UK.
RWE Generation (UK) has taken action to close its gender and diversity pay gaps. In 2021, the company launched a new competency-based pay model. This ensures that employees who have the same competency within the same grade and job family are paid the same.
There is broad recognition across oil and gas companies that they need to raise greater awareness of the types of jobs that are available within the sector, particularly in light of the focus on energy transition, to attract, entice and encourage woman to the industry.
At Pinsent Masons, we have seen the impact of using gender pay gap data at the local level in the energy sector. The GPG tools we use help identify actions well-suited to real situations in local teams, from recruitment to career development. Teams and departments differ, as do the challenges they face, so the solutions to closing pay gaps will differ too.
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