On April 4th, 2018, businesses with more than 250 employees were required to publish data on the gender pay gap between employees at their organisation. The results for the overall labour market were an unfortunate reminder that economic inequality is still prevalent in the UK. From over 10,000 businesses, 78% were revealed to pay their male employees more than their female employees. However, the self-employed wanted to know if this applied to the contractor industry so we did our research and what we found was quite interesting…
An overview of the gender pay gap
Firstly, it is important to establish that the gender pay gap report does not mean that women are being paid less than men for doing the exact same job – this has been against the law since the Equal Pay Act was introduced in 1970. Instead, the report reflects on the average difference in pay between all men and women in a workforce; the issue is thought to be caused by various factors such as the lower proportion of women to men in higher paid industries and the overall lack of women in senior roles.
Although closing the gender pay gap is not just a matter of social and moral importance; it could also have a very significant economic impact. Reports by the global management consulting firm McKinsey Global Institute revealed that closing the pay gap could result in over 840,000 additional female employees in the UK alone, with a potential extra £150 billion contribution to UK GDP by 2025!
The gender pay gap in contracting
The data from the gender pay gap report may seem bleak with 8 in 10 organisations disclosing that their male employees are earning more than their female colleagues but don’t lose all hope. Research collated by various online platforms revealed that there is promise within the contractor industry. IPSE’s Gender Split Report revealed a very close divide between men and women in the contracting industry, with 59% being male and 41% being female. While the online services platform Bidvine.com and the digital IT contracting community, ContractorUK disclosed further encouraging data from their research.
Bidvine.com collected internal data on self-employed workers and freelancers from each top performing sector of their website and the results were quite optimistic. From their key UK industries, the gender pay gap had in fact narrowed significantly, with men on average earning just 1.9% more than women. In certain areas such as personal training, data revealed the gender pay gap was 8.7% in favour of men. However, in the photography sector, women were, in fact, earning 4.5% more than men. What is more encouraging is that the gender pay gap for music teachers was non-existent with both men and women earning on average, the same amount per hour.
Equally, ContractorUK examined a sample of limited company contractors from their database for average daily rates across all industries and learned that the mean daily rate for women versus men was in fact higher. The average male contractor was earning £404 a day while a female contractor was earning £408. Though, it is worth noting that the ratio of men to women within ContractorUK’s client database of PSCs was 80:20. Consequently, while the contracting industry does appear to be taking positive steps towards reducing the gender pay gap, there is still more to be done.
Similarly, across all industries and age groups, the Office for National Statistics (ONS) estimated the average gender pay gap at 14.1% in 2017 and this figure has not changed since 2014. Reaffirming that UK businesses and employers must actively work to address the issue and find ways to help eradicate the pay gap and bring economic equality for both genders.
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