Out-Law / Your Daily Need-To-Know

Recruitment practices can cut UK tech sector gender pay gap

Out-Law Analysis | 02 Jul 2021 | 8:48 am | 3 min. read

The gender pay gap (GPG) that exists in the UK technology sector will diminish over the coming decade if businesses continue to embrace progressive practices in recruitment and mentoring.

Analysis carried out by Pinsent Masons, the law firm behind Out-Law, has found that the GPGs reported by UK technology, media and telecoms (TMT) companies are already starting to shrink in light of action they are taking to help women claim senior roles.

Some initial progress

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 continued challenges posed by the pandemic has prompted the Equality and Human Rights Commission to extend the timeframe for reporting GPG data for the 2020-21 reporting period until 5 October 2021. It has announced that it will not take enforcement action against employers that report before that date. However, to-date approximately 217 TMT employers have reported their GPG data and we have analysed a sample of those employers who have reported so far in order to understand trends and best practices.

Corden Helen

Helen Corden

Partner

Companies have reported seeing better gender balance in recruitment since the reporting obligation was introduced in 2017.

Our sampling found that, on average, women are paid approximately 18% less per hour than men. This is an approximate improvement by one percentage point since the reporting obligation was introduced in 2017, with almost all employers closing their own individual pay gaps.

The 18% GPG figure is slightly higher than in the manufacturing and energy sectors, but lower than other sectors such as infrastructure and financial services where we found that women are paid around 20% less per hour than men. The Office for National Statistics has estimated that the average median pay gap for the sector is 15.5% for 2020, but it is worth noting that this also takes into account companies who have volunteered their gender pay gap data, and is not limited to those employers with 250 or more employees who are obliged to report.

Our sample analysis also found that, on average, there is a 40% difference in the mean bonus payments to men and women, which was significantly higher than other sectors such as infrastructure, which reported a difference of 20%.

Examples of good practices

Across the TMT sector, there is a low representation of women across all levels, but particularly in technical specialist roles and in senior leadership positions.

A number of employers in the sector have, however, been taking action to address this issue. Examples of good practices were shared in the commentary employers are encouraged to share voluntarily to provide context to the raw GPG data they are mandated to publish.

BT Group highlighted its recent ‘People Data’ campaign, which it undertook to better understand the demographics of its workforce. It used the data it gathered to conduct an "evidence-based analysis of experiences across the colleague lifecycle". The company advocates a research-driven approach and thinks of this as vital to improving their gender pay gap. It also flagged the reach of its ‘TechWomen’ programme, with almost 1,700 female employees completing or progressing towards completion of the programme by the end of March 2020. The programme helps women in commercial, operational and technical roles to develop their careers.

FDM Group said it is seeking to improve the GPG in the wider tech sector as well as within its own organisation. In this regard it said it has been working with the techUK Diversity & Skills Council to map engagement "from classroom to boardroom"; advising government committees on various issues around the digital skills gap and gender diversity; and sharing best practice at industry events around the world.

TMT companies across the sector are seeking to educate their employees as to gender equality issues and have created various networks to support employees and facilitate discussions, as well as running company-wide virtual events addressing the issues concerning gender equality in the workplace. 

Companies have reported seeing better gender balance in recruitment since the reporting obligation was introduced in 2017. Examples of how this is being achieved include the introduction of mandatory unconscious bias training for hiring managers and inclusive recruitment processes. Companies are also reviewing job adverts to ensure the use of inclusive and non-gender bias language and some companies are considering making some roles more flexible – for example, making them part-time, subject to job sharing, or within the remit of flexible working policies – to allow for balancing other family and life responsibilities. 

Some companies are seeking to promote the sector at school and university level and with events aimed at teaching female students about technology, coding and robotics. Other companies have signed up to the Good Youth Employment Charter and Good + Fair Employers' Club to demonstrate their commitment in the student market.

Companies are also seeking to increase female representation at senior leadership levels by providing leadership or mentoring training programmes, as well as ‘Returners to Work’ initiatives for employees who have experienced a career break but wish to return to work.

The GPG in the TMT sector will not diminish with quick fixes. The actions many employers are taking now should bear fruit in the years ahead. Those that stand still and fail to address the problem risk losing out on future talent.