When it comes to equal pay and the gender pay gap, this year started with a reminder how far we are from equality and inclusion in employment (again). We've all read the open letter from BBC China editor Carrie Gracie, in which she spoke out about leaving BBC because of pay transparency and gender pay gap issues. “I simply want the BBC to abide by the law and value men and women equally” Gracie said.
Given that only a few months ago the BBC commissioned an equal pay audit (conducted by Eversheds Sutherland and PricewaterhouseCoopers LLP) and a gender pay gap analysis (conducted by EY), one would have thought that all questions about pay transparency have been answered.
After all, the conclusions seemed to redeem the BBC after a transparency exercise in the summer of 2017 revealed that 2/3 of employees paid over £150,000 were male. The PwC report concluded that “The high level job role data does not indicate that systemic gender discrimination is present.”
The EY report on gender pay gap has concluded that, due to lower pay gaps across each pay grade, “the main driver for the BBC gender pay gap is the demographic pay gap.”
But these conclusions were not enough for Carrie Gracie, and we all want to know why.
The difference between the two reports is that they look at two separate issues. The gender pay gap is the difference in pay between the average male employee compared to the average female employee. Equal pay on the other hand is about pay for similar roles.
Both PwC and EY base their work on data assurance. As accountancy companies their expertise lies in ensuring pay data has been collected, consolidated and reported accurately. This forms the basis of trust these companies build when they do the analysis. But in effect, the data assurance questions limit the analysis to answering the question of “What”. What is the gender pay gap? or what data has been used to analyse it? Personally I would also question the extent to which current quality assurance practices are not biased, but this is a topic for another article.
What current data reports produced for the BBC do not do is answer questions such as “Why?” or “What next?”. Neither of the reports has contextualised the findings and they have not set out specific actions going forward that will help explain the gaps and narrow them.
Moreover, by not answering these questions, the Equal Pay Audit leaves even more room for challenge.
“We have analysed the reasons for any pay disparities which exist, and whether they are gender related. We found the following:
- In 91% of comparisons there appears to be a non-gender reason for the pay differential; whilst the quality of the evidence varies (in some cases being particularly strong and in others less so) it is sufficient for ES to draw the conclusion that it is unlikely that the difference in pay is by reason of gender. Further information will need to be gathered in some cases.
- In 8.6% of comparisons there was insufficient information to understand whether there was a nongender reason for the pay differential; further investigations have therefore been recommended.”
I find myself asking, what does that even mean? There is no indication of how these disparities were analysed and how it was decided that they are not gender related. Was it through a decomposition based on other employee characteristics such as tenure, education, training, etc or was it through analysis of job titles? We're in the process of trying to find this out, when we know, we'll update you.
At Gapsquare we use the Oaxaca Blinder decomposition to understand pay disparities between men and women. I’m not going to bore you with it too much, but it’s a statistical method that explains the difference in the means of a dependent variable between two groups by decomposing the gap. It’s widely used around the world to analyse inequalities in pay, health and social justice.
At the moment it is unclear how Eversheds Sutherland and PricewaterhouseCoopers LLP have come to their conclusions. They have not answered the questions of why people are paid differently, and how are these discrepancies are going to be addressed in the future. There is very little context, research or analysis that seems to have gone in to backing up statements in the report.
To us, what this case proves is that answering the questions of 'what' the pay gap is is not enough to build trust with employees and help drive positive change. Analysing the gender pay gap is about much more – it is about working with employees to understand why the gap is there and how companies can engage employees in building equal and inclusive rewards.
This is exactly what we do at Gapsquare – we use technology to focus analysis on answering questions that will help create change: We ask why the pay gap is there, what is driving it, and how can we close it. We save hours for companies in producing their gender pay gap reports and adhering to gender pay gap legislation.
The results are instant, and you do not have to wait for your top talent to resign, or for EHRC to launch a human rights probe into your companies equal opportunities as they are planning to do with BBC. It would probably have saved the BBC a lot of time, if they had sought to ask the questions that really matter before now, but hopefully, what we've all learned is that questions are best answered before your staff decide to leave.
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