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Smaller firms should be made to report gender pay gaps, MPs say

Gender pay gap graphic
  • 3 Comments

The government should force smaller companies to reveal their gender pay gaps and partners’ pay should also be included, a group of MPs has said

The business select committee made the recommendation in its analysis of gender pay gap reporting, calling for the threshold for companies to be lowered from 250 employees to 50. 

MPs argued only half of the UK workforce was covered under the existing requirements, introduced this year, and that there was evidence to suggest a wider pay gap between men and women in smaller firms.

Committee chair Rachel Reeves said some of the biggest gaps were ’obscene’.

There could be big implications for the architectural sector if the government takes forward the recommendations, with about 100 more firms likely to have to supply their data than under the current requirements. This year only 11 architectural practices were obliged to reveal their gender pay gap figures. 

Of all the firms in the AJ100 – in which practices are ranked by how many architects they employ – only 14 would fall below the proposed threshold of 50 staff. 

This year in architecture, the average difference between median hourly earnings of male and female staff was 16.3 per cent – only slightly better than the national average of 18.

Under the existing government rules, practices set up as limited liability partnerships (LLPs) were not required to include partner pay, as they are not technically employees.

Four firms, all with comparatively low pay gaps – Hawkins\Brown (2.6 per cent) Sheppard Robson (10.9 per cent), Allies and Morrison (10.5 per cent) and tp bennett (12.8 per cent) – confirmed this was the case with their figures. 

But the committee said the government was wrong to exclude partners and this data should be included in next year’s reporting.

’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.’

The report found that across the UK, four in five (78 per cent) of organisations reported gender pay gaps in favour of men.

Pay gap scatter graph

Pay gap scatter graph

 

  • 3 Comments

Readers' comments (3)

  • Bruce Buckland

    Dear AJ,

    You are a great publication. Please stop pedalling this rubbish about the gender pay gap. Fair enough to report what MPs are proposing, but please take the time to understand the issue in a little more detail; as journalists you have a professional duty to point out when their proposals are daft, which you do very well on a great many other topics.

    A GCSE maths student is smart enough to understand why the statistics of this are totally wrongheaded. Correlation is not causation. Mean average hourly pay is not a good measuring device. It is misleading and overly simplistic.

    And also there is no such thing as the same job in 99% of cases. And even if there was, supply and demand vary. A firm desperately in need of a particular level of employee (say because of a new project win) will always be willing to pay more at that time than the same firm when it has just lost a project. The job market is exactly that, a market for labour.

    I do hope as responsible and intelligent professionals you will present the flaws in the gender pay gap argument clearly to your readers and let them make up their minds for themselves.

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  • The previous comment makes no sense. The mean average pay for each gender is a straightforward calculation, and is exactly what it says on the tin. There may or may not be good reasons why certain practices have higher gender pay gaps, but regardless, this figure is a piece of factual evidence. Evidence of what? In a profession where most architecture schools are 50/50, it shows that women are - for whatever reasons - getting stuck at the bottom of the profession and/ or not valued as much as men by their employers. As someone who runs a practice with 48% women, and can report a pay gap of 1% in favour of women, I see no good reason at all why high-quality firms would not be able to attract and keep high-ranking women architects. And consequently no reason other than old-fashioned gender bias why a high-quality firm should not be able to keep their gender pay gaps in check.

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  • Bruce Buckland

    Hi Fiona,

    Thank you for taking the time to respond to my comment.

    Firstly may I say that I am a big fan of your practice’s work, especially your St. Hilda’s proposal; it is quite beautiful. I hope though that you will be able to see the understandable errors in your assessment, as it is only once we properly analyse the facts that we can address the actual causal factors behind the gender imbalance in the profession.

    You quite rightly say that the mean average hourly pay is a straightforward calculation, but unfortunately it is precisely because of its simplicity that it does not sufficiently accurately represent the complexities of the topic. The mean (as opposed to the median or mode) is the least reliable measure of average, as it is affected so much by outliers. The pay-gap legislation addresses this to some extent by requiring a quartile split across the range of salary values, but this does not eliminate the problem, not least because the overall figures tend to be the only ones that get reported.

    You also quite rightly precede your other assertions with a caveat of ‘for whatever reasons’. You are right to acknowledge that there are a many unknown variables affecting relative pay levels. You then make a very big leap though by your assertions that women are both ‘stuck at the bottom of the profession and/or not valued as much as men by their employers’. This is a non-sequitur. As far as I am aware there is no reliable evidence to suggest either of these is true to any degree. If you know of any that suggests otherwise, please do link to it.
    We will only get the bottom of this problem once we do a detailed multivariate analysis incorporating all of the relevant causal factors.

    You go on to say ‘I see no good reason at all why high-quality firms would not be able to attract and keep high-ranking women architects.’ I completely agree. The issue is about the relative numbers; i.e the relative probability that any given woman and any given man will continue to choose to favour their career over other areas of interest, such as family or other projects/activities. Now of course these things should not be incompatible with a successful career, but the person who works 80 hours a week is far more likely to do better in their career than the person who works 40 hours a week, and there are more men who are willing to do that than there are women, hence those individuals are disproportionately likely to have very high career success (I can recommend Warren Farrell’s section of ‘The Boy Crisis’ for a more in-dept analysis of these issues and their origins). How hard people work does affect how likely they are to succeed (and I’m someone who has always disagreed with the culture of overtime in architecture, and who doesn’t do it myself, but that's another topic).

    There is also a very strong body of scientific literature on the psychological differences between men and women, some of which manifests itself in factors that are predictors of success in the workplace, such as differences in conscientiousness (women are higher on average), and disagreeableness (women are lower on average). But it is important to note that there is far greater difference within the groups than between them (i.e the normal distribution curves overlap a lot but are offset).

    There are a great many variables that could be further considered, but I’ll stop taking up your time now.

    Thanks again for commenting; it’s a conversation that needs to be had in a lot more depth I think. I hope the AJ will engage with this topic with an open mind so everyone can be involved in the discussion. :)



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