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Pay audits not efficient way of closing the gender earnings gap

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Pay audits have been described as a blunt instrument when it comes to helping to combat the gap in earnings between men and women.

Dianah Worman, the diversity adviser at the Chartered Institute of Personnel and Development (CIPD), made the comment after figures released by the Office for National Statistics showed that the gender pay divide has narrowed slightly in the last year.

According to the ONS, men in full-time employment earn a median hourly rate of £12.97 compared with £11.39 for women. The gap is 12.2 per cent, down from the 12.6 per cent recorded last year.

It is also the narrowest point between men’s and women’s earnings since records began; a decade ago the divide was 17 per cent.

In the case of part-time workers, where the female proportion of the overall workforce is higher, women actually earn more than men: £7.86 an hour on average as opposed to £7.71 an hour for their male counterparts.

Once both full-time and part-time employment are included, the gender pay gap is 22 per cent in favour of men, a small drop from the 22.5 per cent in 2008.

Harriet Harman, the minister for women and equality, applauded the fall and promised that new regulations will shrink the deficit further still.

Ms Harman said: “Employers will no longer be able to rely on keeping their pay structure secret. We will ban secrecy clauses – which exist in nearly a quarter of workplaces – so women can challenge unfair pay, and we’ll make public authorities report on gender pay.

“We will ask businesses to report on gender pay, but if voluntary measures do not work by 2013, we will use our legal power to require it.”

A spokesman for the Equality and Human Rights Commission pointed out that, given the present rate of decline, it will still require 17 years before gender pay inequality is corrected and encouraged “employers to look at their individual gender pay gap and make it a priority to address”.

He added: “The commission is working closely with the business community to develop agreed measures that private-sector employers can use to report their gender pay gap.”

However, the CIPD cast doubt on whether compulsory gender pay audits, as proposed for firms employing more than 250 staff by the Equality Bill should too few employers carry them out voluntarily by 2013, will have the desired effect.

Dianah Worman referred to a CIPD survey that found that fewer than 1 in 5 private sector employers measure their gender pay gap, the vast majority, and especially smaller employers, considering it unnecessary.

Ms Worman commented: “The bulk of private sector employers appear complacent about the gap – especially smaller employers who won’t in any case be affected by the reporting provisions of the Equality Bill.

“The findings overall suggest that compulsory pay audits are at best a blunt instrument for promoting effective action on closing the gender pay gap and highlight the need for government to instead focus on helping employers in all sectors understand the business benefits of tackling unfair treatment on pay.”

The CIPD argued that employers who do assess any pay gaps tend to find it offers helpful insights and useful benchmarking data. But the CIPD study also discovered that, at £5,000, the cost of a gender pay audit is fifty times more expensive than the government claims.