Small and medium enterprises (SMEs) are making strides in closing the gender pay gap – but does the inequality extends to employee benefits too?
We are now well beyond the deadline for companies to report their organisation’s gender pay gap.
The data has revealed widespread disparity between the salaries picked up by women compared with that of men.
Of the 10,016 companies and public bodies that have filed their report, men are paid more than women in 7, 795 of them – that’s 78% (based on median hourly pay)1. Additionally, there are no sectors where, on average, women are paid more than men2.
Although only companies with more than 250 employees were required to submit their data – discounting many SMEs – there is still much to learn from the findings for SME employers, including some reasons to be cheerful.
Gender pay gap and SMEs
Growth Business reports that UK SMEs are working twice as quickly as larger enterprises to close the gender pay gap.
Every sector, where SMEs dominate, reported double-digit percentage growth for female pay over the last decade. The research states that the national gender pay gap stood at 21% ten years ago and today is more like 17%. But for sectors with a greater number of SMEs, the gap has fallen from 22% to 13%3.
“Small businesses are not shackled by tradition, legacy or bureaucracy in the same manner as many large companies can be,” says Darren Nicholls, Product Manager for Informi, who carried out the research.
“That said, clearly a double-digit gap is still far too high. There’s a great deal more to be done4.”
Understanding how SMEs can support employees
Better understanding how SMEs can support employees requires a certain amount of internal examination. When it comes to looking after employees, where can your organisation improve? And what can you do to affect change while keeping finances and business performance healthy?
‘Think Business, Think Equality’ from Close the Gap is a free, online self-assessment tool for smaller employers. It helps to assess employment practices and provide advice on the changes you can make – taking in areas such as flexible working, workplace culture and pay.
One clear path to more effective employee support is through targeted use of employee benefits.
Women and employee benefits in a small business
One report suggests that women value employee benefits higher than men, but receive fewer of them5.
There are a few possible reasons for that. One could be the general lack of women in more senior roles – with benefits tending to kick in at the higher, more executive level. The percentage of women in senior leadership roles is just 22% in 20185.
Another could be the larger number of women working in part-time roles compared with men7 – again, benefits may only be valid for full-time positions.
We know that more mothers than ever are working, with employment rate of mothers in England has increased to 73.7% in 2017 – a rise of 11.8 percentage points over the past two decades8.
Regardless of the reasons, adjusting your employee benefits offering to ensure that women are sufficiently covered and supported is a clear way of actively working towards complete gender equality in the workplace.
What to do next
For SMEs, juggling the demands of keeping finances healthy and employees fairly remunerated can be a difficult task.
Employee benefits can be a low-cost, high-impact solution.
For employers looking to offer support to working mothers, for example, Unum’s Critical Illness policy can be extended to include the children of employees at no extra cost.
The smaller workforce in an SME compared with a larger corporation can result in a more personal relationship between employer and employee. This could well be a contributing factor to the quicker pace that SMEs are closing the gender pay gap.
1,2 The Guardian. (2018). Gender pay gap: what we learned and how to fix it
3,4 Growth Business. (2017). Why UK SMEs are twice as quick to bridge the gender pay gap
5 Grass Roots. (2016). The future of employee benefits, p9
6 Grant Thornton. (2018). Women in Business: New perspectives on risk and reward, p11
7 ONS. (2018). Understanding the gender pay gap in the UK, Figure 2
8 ONS. (2017). Families and the labour market, England: 2017
Disclaimer: This article has been written in collaboration with Unum. It is for information only and is not specific advice. It is based on our current understanding which may change in the future.