The committee’s inquiry, based on the first reporting round, found that while the median pay across the economy is 18% in favour of men, gender pay gaps of over 40% are not uncommon in some sectors and 78% of organisations reported gender pay gaps in favour in men.

Its analysis shows that 1,377 employers (13% of the total) have gender pay gaps in favour of men of over 30%.
The committee pointed out that that only around half the members of the UK workforce are expected to be covered by the present reporting requirements, which require data from companies with over 250 employees, and says the net should be widened to include those with over 50 employees.
Carolyn Brown, employment partner and head of client legal services at RSM, said: ‘One can certainly see the need for reducing the reporting threshold if we are to make real progress in closing the gender pay gap.
‘However, government must balance this against the regulatory burden weighing heavily on the shoulders of SMEs and medium-sized employers. The reporting exercise requires considerable resource which isn’t readily available to those businesses. That lack of resource may lead to reporting irregularities, distorting the true figures and potentially placing a greater burden on the EHRC in its efforts to establish compliance.'

The BEIS report also recommends that when the regulations are amended that both part-time and full-time gender pay gap statistics are required to be published, and wants changes to the way in which bonus calculations are made so that it is on a pro-rata basis and that this change is accompanied by the publication of clear guidance on the method of calculation.
It stated: ‘The exclusion of the highest paid people in organisations makes a nonsense of efforts to understand the scale of, and reasons behind, the gender pay gap.
‘The government was wrong to omit the remuneration of partners from the figures required in the regulations.
‘It is disappointing that some of our leading providers of professional services initially sought to avoid revealing the true extent of the gender imbalance at the top of their companies and more disappointing that one—Allen & Overy—continues to delay publication.’
The committee wants the government to consult on introducing requirements to collect and report pay gap data in respect of disability and ethnicity with the aim of making this a requirement by 2020. The report says that ‘public naming and shaming on an annual basis’ is not enough by itself to promote greater diversity and wants to see a number of other measures. These include closer monitoring by the Financial Reporting Council (FRC) of the quality of reporting on gender diversity and the pay gap in annual reports, and a recommendation that the revised stewardship code includes reference to ensuring that gender diversity is properly reflected throughout the company, notably at board level. 

Rachel Reeves, chair of the BEIS committee, said: ‘A persistent gender pay gap shows that companies are failing to harness fully the talents of half the population. The penalties of working part-time, both financial and in terms of career progression, are a major cause.
‘Companies need to take a lead. For example, why aren’t they offering flexible working at senior levels? They must look at why they have a pay gap, and then determine the right initiatives, policies and practices to close it.
‘Chief executives should have stretching targets in their key performance indicators and be held to account for any failure to deliver.’

Jon Terry, diversity and inclusion consulting leader at PwC, said: ‘The recommendation to extend reporting to ethnicity and disability by 2020 should be welcomed as an opportunity to shine a light on other aspects of diversity.
‘This will be a challenge for firms as very few organisations collect sufficient data to be able to calculate BAME and disability pay gaps. Companies should act now to start the process of encouraging their staff to provide this information on a voluntary basis, bearing in mind the legal and data protection issues involved.
‘The focus on the importance of practical action planning to close the gap is particularly important. We know from experience that a pragmatic, data-driven approach is the most effective way to close the gap. Actions should have measurable outcomes and need to be focused on where they will have the biggest impact, based on a business’s individual circumstances.’
The BEIS report follows confirmation from the government that all 10,000 UK employers identified as having over 250 workers have now published their gender pay gap data. This shows that more than three out of four in scope UK companies pay their male staff more on average than their female staff, more than half give higher bonuses to men, on average, than women, and over 80% have more women in their lowest paid positions than in their highest paid positions.
In response the Equalities Office has published guidance for companies to help them improve the recruitment and progression of women and close their gender pay gap.

BEIS report ‘Gender pay gap reporting’ is here

Actions to close the gender pay gap guidance is here

Report by Pat Sweet