Gender pay gap figures in UK manufacturing impacted by pandemic

Out-Law Analysis | 22 Jul 2021 | 11:36 am | 5 min. read

The latest gender pay gap (GPG) data reported by UK manufacturers could give the impression that the GPG in the sector is lower than it truly is in reality.

Our analysis shows that, despite changes to working patterns brought about by the coronavirus crisis which had the greatest impact on roles predominantly held by male employees, there was still a reported increase in GPG in the manufacturing sector since 2018-19. However, our analysis has identified that while there remain challenges for employers in attracting more women to work in the sector, many are making concerted efforts to achieve a more gender balanced workforce and reduce differentials in pay.

Childe Rob July_2019

Rob Childe

Senior Associate

Women working for large manufacturing companies are paid just over 13% less per hour than men

What the data says

The GPG reporting regulations 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.

These 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. GPG data must be reported annually. The last reporting deadline for 2020-21 was 4 April 2021 to reflect a snapshot date of 5 April 2020. However, in light of the continuing impact of the pandemic on businesses, employers were given until 5 October 2021 to report their 2020-21 data.

At the time of our analysis in June 2021, 416 employers in the UK manufacturing sector had reported their GPG for 2020-21.

Of those, women working for large manufacturing companies are paid just over 13% less per hour than men. While this significantly lower than the average GPG in other sectors, such as financial services, energy and technology and construction, it does represent an increase from the 9% average GPG recorded in UK manufacturing in 2018-19 – the requirement to publish GPG data for 2019-20 was dropped as businesses grappled with other challenges posed by the pandemic.

The Office for National Statistics (ONS) reported a slightly higher national average median pay gap of 16.3% for the manufacturing sector for 2020-21 in comparison to the data we analysed from the government portal. However, the ONS considers data from all companies, not just those with 250 or more employees who are under an obligation to report their GPG data.

According to the data we analysed, there is also, on average, a 36% difference in the mean bonus payments paid to men and women within UK manufacturing. Many manufacturers reported that women are paid more in bonus payments than men, but eight companies reported a 100% difference in mean bonus pay, meaning that no women in their employment received a bonus in 2020-21.

Underlying causes of the pay gap within UK manufacturing

Across manufacturing, male employees are dominant and occupy more of the senior positions, which typically attract higher rates of pay.

Men are also, as leading economist Laura D'Andrea Tyson said bluntly in a recent article, “more likely to hold jobs at any skill level in manufacturing, a sector that pays relatively high earnings”, compared to women who she said “are more likely to hold jobs in educational services, a sector that pays considerably less than manufacturing". Men tend to be more prevalent in higher earning office-based or field sales roles, which may be another factor.

Shift patterns, offshore work and anti-social hours are some of the reasons the manufacturing workforce remains predominantly male, but there is also a fundamental challenge to overcome in encouraging women to train in subjects that provide the necessary skills to work in the sector – there are far fewer female graduates in STEM subjects at university, for example.

The pandemic has impacted the GPG reported by most companies across sectors, but its effect in this regard in manufacturing is perhaps starker than in many other industries. In 2020 in the UK, many automotive manufacturers placed a large proportion of their staff on furlough and reduced shift work, though others, such as food and drink manufacturers, increased production. The majority of those employees whose income was affected were men. This has been acknowledged by some employers as skewing the results of the GPG at the relevant “snapshot” date and therefore it may be that the GPG is in fact greater in reality than the figures suggest for 2020-21.

Childe Rob July_2019

Rob Childe

Senior Associate

The GPG reports we analysed for the manufacturing sector also highlighted that some employers have developed returners programme to support women who may have taken time out of work to have children, or otherwise introduced or expanded existing flexible working policies

Positive action by employers

While challenges in reducing the GPG persist in UK manufacturing, many employers in the sector are taking direct action to address the problems faced – and being recognised for doing so.

Many manufacturers have put in place specialised training programmes for female employees. Siemens Mobility, for instance, launched a development programme called "7 Pillars of Business Confidence" to invite women employees to undertake training on topics such as imposter syndrome and harnessing personal power to establish a career path. Other employers are rolling out mandatory inclusive leadership training to allow leaders to recognise the impact of inclusion on performance or mandatory refresher training to all employees linked to the company's diversity and inclusion values or code of conduct.

Some employers, including Siemens Mobility, have also put in place employee networks to form a support system to ensure a diverse workforce and to hold events in the workplace to raise awareness of diversity, equality and inclusion. Siemens Mobility also led the development of an industry-wide network for senior women in transport and worked with a number of partners across the mobility industry to better connect women within senior roles.

Recruitment strategies are also being adapted. Many employers in the sector have engaged in targeted recruitment to inspire women via STEM initiatives. Diageo reported that it had enrolled a further two female students as engineering scholars, following the intake of two brewing and distilling scholars on Diageo scholarships at Heriott-Watt University in September 2018. The company also said that it had been rated first in the Equileap Top 100 companies globally for gender equality.

Diageo is also one of a number of employers to have set specific targets for increasing the proportion of women in senior management roles. Its "Society 2030" global action plan includes an aim for 50% of the leadership roles in the business to be held by women by 2030.

Other employers reported they had met targets they had previously set. Shell UK achieved its ambition of having 30% female senior leaders in the UK by 2020 – a target achieved in the first quarter of 2019. The figure has since increased to 32.6%. Similarly, BP Oil UK exceeded targets set by the company in 2012 – by the end of 2020, 29% of group leaders were women compared to 17% in 2012.

The GPG reports we analysed for the manufacturing sector also highlighted that some employers have developed returners programme to support women who may have taken time out of work to have children, or otherwise introduced or expanded existing flexible working policies. A few manufacturers said they have introduced equal family leave policies, meaning employees are entitled to an equal of 52 weeks' parental leave regardless of gender, sexual orientation, surrogacy or adoption.

Other positive practices, including reviews of succession planning to support women into more senior roles, and the development of leadership and mentoring schemes, were also reported.

Some employers are even considering their use of language in job advertisements and which recruitment channels they use. This, they say, has led to an improvement in the number of women applying for jobs at their company.