According to a report by business advice group Korn Ferry Hay, along with businesses from the oil and gas and technology sectors, the life sciences sector has the biggest gender pay gap across UK industry.
The report is likely to come as no surprise to females working in the sector. Back in 2015, the Sunday Times reported that female science professors are paid thousands of pounds less than their male counterparts, despite carrying out similar duties. It identified a number of top universities with a significant disparity in pay between men and women employed in their science facilities, a statistic that one leading female scientist and advocate for the advancement of women in science, Professor Uta Frith, has described as “shameful”.
The government’s attempt to address the gender pay gap is to require compulsory gender pay gap reporting for all employers (including in the life sciences sector) with 250 or more employees in England, Wales and Scotland. Employers are required to take a snapshot of their gender pay gap as at 5 April 2017 and publish the results by 4 April 2018. This process has to be repeated annually going forward. Businesses with less than 250 employees are not currently legally obliged to comply with this process or publish results, but should be aware of the regulations, as this position may change in the future and some businesses are being required to publish similar data as part of pitch processes regardless of their size.
What should life sciences businesses be doing now?
Affected businesses should start collating the relevant data now. They will need to publish:
- the percentage difference between male and female mean and median hourly pay;
- the number of employees in each of four quartile pay bands based on the employer’s overall pay range;
- the percentage difference between male and female mean and median bonus pay over a 12 month period; and
- the proportion of male and female employees who received a bonus during that 12 month period.
Businesses can also publish an accompanying narrative justifying the difference in any pay and setting out any action they plan to deal with the gap. This is not compulsory but is recommended.
How can life sciences businesses close the gender pay gap?
Life sciences organisations face significant future challenges. There is a continuing pressure to drive down costs whilst remaining at the cutting edge of technology. The gender pay gap figures highlight a key issue, namely that the sector is not benefiting from a fully diverse pool of talent. For instance, studies have shown that having women in senior roles can improve the performance of organisations. Additional benefits such as greater innovation and improvement in financial position can also arise with a diverse range of employee talent. The gender pay gap demonstrates that life sciences organisations are currently missing out on major opportunities.
Knowing that the problem exists, life sciences organisations can take the following five steps to close their gap:
1. Establish the current position: gender pay reporting will go some way to enabling organisations to identify where their gender pay gap issues lie. Organisations can use the opportunity to critically analyse the position they are currently in and where they want to be.
2. Consider flexible working: agreeing to flexible working arrangements is by no means going to solve the issue of the gender pay gap in its entirety, but it has been shown to benefit not just employees but employers too. If flexible arrangements are agreed to, women and men may see more of a future with their current employer and feel there is a higher chance of progressing to a senior role.
3. Ensure full commitment: for the gender pay gap to reduce, the organisation as a whole needs to be committed. The message should flow down from the CEO and senior management should be consistent in their approach. If viewed in the right way, the reporting obligations can be a positive opportunity for businesses to address any gender pay gap and publicly demonstrate in the accompanying narrative to the report the steps that they are taking to eliminate any gap. Organisations may want to consider offering training to their employees, particularly those with line manager duties, and identify ways relevant to the business in which employees can help close the gap.
4. Review pay practices and progression: organisations with a high gender pay gap figure that cannot be justified should review their pay practices by looking at the company’s pay review procedure and approach to pay levels for external recruits. Where the gap appears to be due to failure by females to progress throughout the business, companies can consider steps to address this such as incentives for women to return to roles after maternity leave or mentoring schemes to help female progression.
5. Ask women what they want: it may seem obvious but opening up a dialogue with female employees about their experiences can be one of the best ways to ascertain how to move forward. If an organisation suffers from a high female attrition rate, where appropriate, it can use the exit interview to understand why the employee is leaving. It may be too late in that case but lessons for the future can be identified.
How can Osborne Clarke help?
As employers are often dealing with the unknown, it is important to keep the data and initial narrative legally privileged and confidential until the employer is comfortable with both the data it is disclosing and the justification for any issues that arise out of the report. Osborne Clarke can assist with this but we need to be involved in the process as early as possible in order to ensure legal privilege is retained. For more details please contact Naomi Flynn or your usual Osborne Clarke contact.