Louise’s Lowdown: Can pay data make a difference?

Average pay differentials have been brought to the fore on both sides of the Atlantic this summer.


In the US, the Securities and Exchange Commission has adopted a final rule that will require public employers to disclose the pay ratio between the chief executive officer and the ‘median employee’.

Meanwhile, in the UK, the government has launched a consultation to establish the details of its plans to make gender pay gap reporting compulsory for employers with 250 staff or more.

One of the more problematic aspects of both announcements is the concept of an ‘average’ figure. US employers have been granted a degree of flexibility in determining what constitutes a median employee and the median compensation received by them. While reporting details are yet to be finalised, the UK’s gender pay regulation will focus on the average salaries of male and female staff, which provides a different, and arguably less clear cut, data set than a comparison of earnings for a man and woman performing the same job function.

The difference in average male and female salaries could, however, help draw attention to the wider factors impacting female employment, such as a lack of women in senior roles, retention issues around motherhood, and concerns over childcare costs.

A number of employers are already addressing these issues through their HR strategies and benefits programmes. This includes schemes such as networking and knowledge-sharing events for women, support groups for parents, flexible-working arrangements, and enhanced maternity and paternity packages.  

Aside from establishing reporting criteria, the government’s consultation will consider what else can be done to ensure that women of all ages are well-represented across the career spectrum, and that they have the opportunity to reach their full potential in their chosen field. There are some excellent examples of employer best practice in these areas that could help the government and industry in achieving this aim.

Up to a point, we expect the salary of a chief executive to be higher than that of the median employee (whatever that may mean), and this can usually be justified by the level of responsibility that the role entails. Attempting to justify an average wage gap between the genders, let alone differing pay for a male and female employee in the same role and with a comparable level of skill and experience, is a whole other ball game and one that we should not have to play in the 21st century.

Louise Fordham

Deputy Editor

Tweet: @LouiseFordhamEB