Gender pay gap reporting rules likely to spur new 'women in tech' initiatives, says expert

Out-Law Analysis | 17 Mar 2016 | 11:30 am | 3 min. read

FOCUS: Technology businesses are likely to take new steps to encourage more women into the industry as a result of new gender pay gap reporting regulations being introduced in the UK.

There is a gender imbalance in the technology sector and a lack of women at the top of tech companies. The problem is a deep-rooted problem which will require government, education bodies and businesses to collectively address.

However, the problem is likely to be highlighted in gender pay gap data that major tech businesses will have to disclose from as early as 2018. The raw data could embarrass tech companies and they will want to use their freedom to publish accompanying information to put the data into context and explain what they are doing to address the shortage of women in tech more generally.

We can expect businesses to proactively involve themselves in new initiatives to get women interested in a career in technology in response to the new rules, including by taking advantage of the government's new apprenticeship levy scheme.

The government's plan to force major employers to disclose gender pay gap data is part of its broader objectives of eliminating inequality in the workplace and helping more women get into senior roles.

In February it published draft gender pay gap reporting regulations which, if adopted, would require large UK employers to publish their mean and median gender pay gaps, as well as the number of men and women within each 'quartile' of their pay distribution.

Businesses with more than 250 employees could be required to calculate their pay gaps from as early as next April, with the first figures due for publication in 2018, according to draft regulations.

The new rules will have a critical impact on recruitment and retention, as well as brand and reputation, and so businesses need a well thought out strategy for communicating and contextualising the current gap and explaining what they are doing to close it.

One of the main problems technology businesses face is that the sector has traditionally attracted far fewer women than men.

It is estimated that fewer than one in five of workers in the technology sector are female and that women account for less than 10% of all senior executives employed by technology companies.

The statistics show a clear gender imbalance in the industry and it is likely to be reflected in data major tech companies disclose when the gender pay gap rules come into effect.

Technology companies will therefore want to show what steps they are taking to help address some of the fundamental reasons behind why so few women work in technology compared to men.

Changes to recruitment practices might help, from employers being more open to discuss childcare issues with prospective new staff, to using less technical and male-dominant terminology in job adverts and actively pursuing a policy of 50/50 gender split for interview candidates, for example.

More broadly we could see more technology businesses engage with schools to promote science, technology, engineering and maths (STEM) to girls and partner with local colleges and universities to provide a clearer pathway for female students into employment in the tech industry.

Gender pay gap reporting obligations could also spur technology businesses to identify more female apprentices.

The largest employers in the UK will begin paying an 'apprenticeship levy' from April 2017 as part of government's plans to fund three million new apprenticeships over the next five years. Employers will have an opportunity to offset some of the cost of the levy – 0.5% on wage bills – where they fund their own apprenticeship places. The new levy system, considered together with the gender pay gap regime, could spur technology companies to encourage women to take up apprenticeships with them.

New women in tech initiatives would complement the broader push from the business community to boost digital skills in the UK in light of the widely reported and acknowledged shortage of people across the UK workforce trained in utilising the latest digital technologies.

Results from women in tech initiatives might take some time to be reflected in gender pay gap data, given the time it will take to encourage a new generation of girls and female students to pursue a career in the tech industry. It will also take time for women starting out in the industry to work their way up to the top of tech companies.

However, as well as bringing greater diversity to their business, embracing women in tech initiatives will help tech companies contextualise their gender pay gap data and avoid negative publicity that could arise when the information is made public. With reputation management at the centre of the board room agenda, tech businesses should view the gender pay gap regime as an opportunity to lead the market in supporting women in tech.

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