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The Gender Pay Gap in the Food Manufacturing Industry

13 Nov 2017

 

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The imminent change in gender pay gap reporting regulation is going to have a significant impact on almost every sector of employment.  With around seven months to go it is important to see what progress Food and Drink Manufacturers have made towards preparing for this change, and also to remind the industry of what is involved in this new reporting.

Measuring the Gender Pay Gap

The legislation requires that organizations with 250 or more employees report on their gender and bonus pay gaps by 5th April 2018. The purpose is not to ask who is earning what, but to determine what women are earning compared with men (CIPD, 2017). This should not be confused with the ‘right to equal pay’ gap which focuses on salaries of men and women in the same level or job. The reporting in question is in reference the overall difference in the average pay between all male and female employees in the workforce.  

The information is being requested from over 9,000 companies from all voluntary, public and private sectors. Collectively they account for over 15 million employees - roughly half of the UK’s workforce. The government has also suggested that a detailed action plan describing the required steps to remedy the situation would be beneficial for all parties involved.

 The essential measures that the government are looking for are;

  • Pay Gap Mean and Median;
  • Bonus Pay Gap, Mean and Median;
  • Bonus Pay Proportion; and
  • Quartiles.

The pay/ bonus gap distinguishes how much more or less women are paid as a percentage to men. The bonus proportion indicated which gender receives more in the way of bonus pay. The Quartiles identify how many men and women are in each quarter of the employer’s payroll. 

The Gender Pay Gap in the Food Manufacturing Industry

How the Report Will Impact Employers

The reporting will foster a transparency around the gender pay gap, with the intention to boost the economy rather than tackle gender inequality. According to the CIPD (2017) it was estimated that the under-utilisation of women’s skills costs the UK economy 1.3-2% of annual GDP. By eradicating the pay gap and creating supportive training programmes a contribution of around £41 billion in annual spending can be expected.

The reporting will undoubtedly cause anxiety amongst some employers. Companies will be under scrutiny from the public and media once the pay gaps have been reported, and this may result in reputational damage or an increase in equal pay claims by employees. 

In order to minimise this, companies will need to accept these reactions and strategically work to create effective communication highlighting the decisions that have been made and the plan of action moving forward.

The Progress So Far in Tackling the Gender Pay Gap

According to the GOV.UK website 126 employers have listed their data publically - 17 of them are manufacturing companies and eight of these are food manufacturers.

With around half of the listed manufacturing companies being within the food and drink industry, it is fair to say that they are getting ahead of the game. Interestingly, 50% of the companies have reported paying higher mean bonuses to women than to men, and 50% of them have also reported more balanced percentages in terms of the male - female bonus pay out.

Large variances are currently being found in the upper quartile of the eight companies, suggesting an average 42% gap between male and female employee numbers. This percentage does decrease as the quartile lowers from 40% to 27% and to 19% in the lower quartile, respectively.

The pattern in these initial figures is supporting the need for development and training programmes and apprenticeships, which the FDF has pledged to triple by 2020 (FDF, 2017). There is also a requirement for approximately 140,000 new recruits to the food and drink manufacturing industry. These need to be in place by 2024 in order to deal with the demand created from around 70 million people. The process of decreasing the gender pay gap and the increased training and apprenticeship programs could see an increase of £150 billion to the UK’s annual GDP by 2025.

Going Forward

Efforts to focus and promote STEM subjects at schools and inspire more young girls to get involved are already underway. One such programme is ‘Taste Success- a Future in Food’, an industry-led campaign engaging with younger generations and academic leaders. The campaign focuses on promoting the exciting job opportunities within engineering which are highly skilled and well paid.  Other policies are being implemented, such as gender responsive teaching strategies and responsive careers counselling, which aim to help students develop their full potential in STEM-related subjects and provide objective guidance to help students realise the opportunities. These developments could help bridge the gender pay gap, with the upcoming reporting as a catalyst.  

The food and drink manufacturing sector is definitely exhibiting exciting prospects for future careers and supporting it with detailed action plans showing how the prospects will become a reality. Also, with the recognition that there is a skills gap and a potential gender pay gap, the Food and Drink Manufacturing industry is proactively working to address inequality - benefitting the economy and adding to the £28.2bn which the industry currently contributes. 

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