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Pay Gap in Britain Could Push Companies to Promote Women

April 8, 2018 GMT

By Jena McGregor

The Washington Post

A new reporting rule in the United Kingdom requires companies that have more than 250 U.K. workers to disclose data on any gender wage gap by Wednesday -- and so far the numbers reported by companies from a range of industries have hardly been flattering.

The average hourly pay rate for women at Deloitte in Britain was 18 percent less than for men (and up to 43 percent less than for men, depending on whether one includes partners).

At Intel’s U.K. operations, women make 33 percent less than men on average, the chipmaker reported. And at Goldman Sachs’ U.K. arm, the gap is nearly 56 percent.


But while much of the focus has been on the double-digit pay gaps -- prompting a #PayMeToo online campaign in the U.K. as hundreds of companies rushed to meet the April 4 deadline -- perhaps more telling is another set of figures that each company must also report.

In addition to calculating differences in bonus pay and the overall average and median gap in hourly wages -- which does not take into account things like job descriptions, education levels or years of experience -- companies are also expected to show the gender breakdown of workers they employ across four pay bands in the country, from highest to lowest.

The numbers won’t surprise anyone who has studied the issue, as it’s well known that companies tend to have fewer women in their leadership ranks -- and therefore in their highest-paying jobs, causing a disproportionate effect on the overall numbers.

“It takes you back to the age-old question, which is why are we seeing more women in the lower quartile and not in the higher quartile?” said Cheryl Pinarchick, who co-chairs the pay equity practice at the U.S.-based employment law firm Fisher Phillips. “The data in the U.K. is reinforcing that fact.”

Yet by shining a glaring spotlight on what’s been called the “position gap” -- or how many fewer women are at the higher rungs of the corporate ladder -- the U.K. data also reveals a rare company-by-company look that could have a real impact, some experts say.

Companies’ inability to hide potentially embarrassing figures could prompt more pressure to show they’re boosting the number of women in the higher ranks.

“We’re going to be able to track this over time,” said Gail Greenfield, a principal at the New York-based human resources consulting firm Mercer. “The first year maybe they get a pass and are able to say, ‘We didn’t quite understand our situation.’ Next year when they report again, they can’t say that.”


Some companies have been releasing the data with explanations about the efforts they’re making to get more women into higher-paying roles and to shift their gender balance, Greenfield said. “So they’re going to be under pressure to show some improvement in the number of women in the higher quartiles.”

For many companies in the U.K. database -- which includes more than 9,000 employers -- the bar graphs showing the ratio of women to men in the four pay quartiles looks literally like a set of stairs -- an unsettling, realistic illustration of the long-used corporate ladder analogy.

At Goldman Sachs’ U.K. arm, for instance, 17 percent of those in the highest-paid quartile are women, and it steps down from there, with 31 percent in the second, 58 percent in the third and 62 percent in the lowest-paid quartile.

In a memo sent to employees, Goldman chief executive Lloyd Blankfein and president David Solomon said they want to have 50 percent of the firm’s incoming analyst class be women by 2021. “At Goldman Sachs we pay women and men in similar roles with similar performance equally,” the two wrote in March. “However, the real issue for our firm and many corporations is the underrepresentation of women and diverse professionals both in magnitude and levels of seniority.”