Manufacturers need holistic approach to address gender pay gap

The latest gender pay gap (GPG) reports filed by businesses in the sector highlight the positive action being taken by industry in areas including staff recruitment, retention and training, as well as education and technical skills programmes. 

Year-on-year analysis

UK businesses and voluntary sector organisations with 250 or more employees are obliged to publish their GPG data on a government portal where the data is standardised and can be reviewed publicly, as well on their business website. The obligation to publish the data stems from the UK's GPG reporting regulations, which aim to shine a spotlight on the disparity between men and women's pay with a view to encouraging employers to take action to close the gap.

The latest set of GPG data, conveying employers' GPG position as at 5 April 2018, had to be submitted by 4 April 2019.

More than 10,500 employers submitted their data to the government portal in the latest reporting cycle.  The results revealed that 78% of female employees are working for companies that pay them on average less than their male counterparts, although the overall median pay gap was 9.6%, down 0.1% from the pay gap reported in 2018. According to the latest data published by the ONS in October 2018, the national average pay gap, which encompasses all employers, including those not captured by the GPG reporting requirements, was 17.9% in April 2018, down from 18.4% in April 2017.

In the manufacturing sector, the median pay gap recorded in the latest set of figures was slightly below the overall average at 9%. Sectors with the biggest GPGs include construction, where the median GPG is 24%, finance and insurance (22%), and education (20%).

Going beyond the reporting requirements

Although not required under the GPG reporting regulations, it is open to employers to publish an explanation of their GPG data alongside the raw figures they submit. Some manufacturers have taken this step to help provide context to their GPG data. The reports are often illuminating.

In some cases, manufacturers have explained that they have been able to reduce their median pay gap by recruiting more women in to senior leadership roles.

Others have been honest in explaining how changes in their GPG data have been influenced by factors such as business restructurings.

Some manufacturers have also gone beyond their reporting obligations by disclosing their GPG data for their whole group, rather than for just the specific entities in that group with more than 250 employees.

Underlying factors behind the pay gap in manufacturing

Manufacturers face the ongoing challenge of convincing women to pursue a career in the sector. The extent of the challenge has been highlighted by a survey carried out by Women in Manufacturing (WiM) which found that almost three quarters of women would not consider manufacturing careers as a viable option.

Consequently, most employees in the sector are male, and men are typically holders of senior leadership positions.

In their GPG report, many manufacturers attributed their GPG to broader issues with the manufacturing sector and encouraging women into STEM careers as a whole.

One manufacturer stated that shift allowances have also had a significant impact on the overall hourly GPG. It explained, though, that having looked into the opportunity and up-take of shift payments, there is not inequality in this area.

Another manufacturer said it would take time to change the historical over-representation of men in the sector due to the low staff turnover in their loyal and long-serving workforce.

Positive action

While there remains work to do, many manufacturers are taking positive steps to address the GPG in the sector and the long-term challenges of recruiting and retaining talented women.

Drinks giant Diageo has opened a scholarship programme with Heriot-Watt University in Edinburgh to encourage more women into STEM careers and to provide a pipeline of talent for the future. Lots of others are boosting their investment in similar programmes to encourage more girls to consider careers in STEM subjects.

Some manufacturers have introduced new policies, or provided staff training on unconscious bias, while others have moved to introduce guaranteed gender balanced interview panels for senior positions and taken steps to ensure job adverts avoid being unintentionally gender biased, including through the use of more diverse imagery.

The recruitment of more female apprentices has also been a focus for some companies in the sector, and others have also reported on their decision to keep retention rates for female graduate trainees high.

Other manufacturers have developed their own mentoring programmes. Cargill has stated that it will base decisions on individuals' career progress on business results and performance and not their presence, in recognition that many employees, particularly women, have a need to work flexibly for child care reasons. Cargill said it will also provide sponsors to women of potential in addition to mentors.

The focus on parental support is reported by other manufacturers too. Mondelez have a virtual community to support colleagues in relation to parenthood, as well as phased return to work programmes following maternity leave, while Unilever have improved their paternity leave policy to encourage more equal sharing of household responsibilities.

Alstom said it is revising its policy on flexible working and approaching it based on two overriding assumptions: all requests for flexible working will be approached from the presumption of approval unless there is an evidenced-based business reason why the requests should not be granted, and; all roles in the business can be delivered flexibly. Similarly, Knorr-Bremse is advertising all non-industrial roles as flexible by default.

Another example of best practice in the sector include Babcock's use of enhanced reporting and metrics on gender ratios throughout the life of their recruitment process to help monitor and improve performance on an ongoing basis.

Some manufacturers have set out targets in relation to growing the representation of women in senior leadership roles. Alstom has committed to achieving 25% women in management or professional roles by 2020, and Cargill is aiming for gender parity in senior positions by 2030. Heinz said it has already grown the proportion of women in their executive team from 0% to 33% in the last year.

Manufacturers should take note of the best practices and positive actions being taken across the sector. A truly holistic approach is necessary to eliminate gender-based pay disparity in the long term.

Susannah Donaldson is an employment law expert at Pinsent Masons, the law firm behind Out-Law. Contributions also from Justine Cooper of Brook Graham, the diversity and inclusion consultancy owned by Pinsent Masons.