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Gender pay gap: Construction exposed as the worst offender

Gender pay gap: Construction exposed as the worst offender

Construction officially has the worst gender pay gap of any UK industry. Binyamin Ali examines the figures for the 10 biggest contractors and looks at what needs to be done.

The industry now has to face stats: construction’s gender pay gap has been brutally exposed.

Last night the deadline passed for companies to report their gender pay disparities under new regulations, and the resulting data represents a public naming and shaming for the industry.

We now know that construction has the biggest gender pay gap of any British industry, reporting a median difference of 25 per cent. 

Finance and insurance follow close behind at 22 per cent – we also now know that eight out of 10 companies in the UK as a whole have a gender pay gap in favour of men.

So what do the numbers reveal and how is the industry reacting?

Gender pay gap explained

The new regulations brought in this week by the government require businesses with more than 250 employees to publish:

  • Their gender pay gap (mean and median).
  • Their gender bonus pay gap (mean and median).
  • Proportion of men and women receiving a bonus.
  • Proportion of men and women in each quartile of the organisation’s pay structure.

The mean and median are different ways of gauging the disparity in employee earnings.

The mean gender pay gap is the percentage difference between the average male and average female pay packets – so if the average man in a company is paid £30,000 and the average woman £27,000, the mean pay gap is 10 per cent.

However, mean pay gaps can be skewed by a couple of big salaries at the top of a company, so the focus this week has instead largely been on the median figures.

The median is worked out by arranging the earnings of all men and of all women from highest to lowest, and isolating the pay packets of the man and the woman who are exactly halfway down the list. The median gender pay gap is the percentage difference between these two midpoint figures.

Inspire Me

Construction News continues to campaign for greater gender diversity in industry leadership roles.

CN launched the Inspire Me campaign to encourage women to seek leadership roles in construction. The next Inspire Me workshop takes place in Manchester on 13 June.

Visit inspireme.constructionnews.co.uk for further details.

The Office for National Statistics released figures in October 2017 that put the median gender pay gap in construction at 14.9 per cent.

The fact that these ONS figures now appear to have been off by 10 percentage points reinforces the significance of this week’s revelations; companies have nowhere left to hide because they will have to report their pay gap figures annually.

Construction’s top 10

Among the 10 biggest UK contractors by turnover, the gender pay gap figures are even worse than the 25 per cent construction industry average.

Every one of them bar Laing O’Rourke has a median gender pay gap in excess of 25 per cent.

Bouygues UK and Mace Ltd have the biggest pay gulfs among the top 10, reporting median gaps of 40.9 and 39.9 per cent respectively. The statutory reports filed by both companies also revealed that women make up just 7 per cent of employees in the top pay quartile at Mace, while this figure is 11.6 per cent at Bouygues.

Bouygues and Mace declined to speak to Construction News on their gender pay gaps, but both have issued statements acknowledging and accepting that change is needed.

Mace chief executive Mark Reynolds says: “We acknowledge the results in our gender pay report are not where Mace wants to be as a progressive business that cares about its people. We know that we must and will be doing more to recruit women into senior roles and develop Mace’s pipeline of future talent.”

At the other end of the spectrum, Laing O’Rourke reported the lowest disparity among the top 10, with a median pay gap of 8.8 per cent. The numbers also revealed that women make up less than 10 per cent of the top, upper middle and lower middle pay quartiles of the company’s employees.

However, the nature of the metrics being reported means that these low proportions distort and reduce the official gender pay gap, according to a Laing O’Rourke spokesperson.

“Low female representation across all pay quartiles in the construction sector, and Laing O’Rourke’s direct-delivery operating model, impact the overall figures,” the spokesperson says. “The calculation requires us to remove overtime rates, giving an unclear picture of real reward, reducing the average reported pay of our directly employed workforce. Given that these employees are predominantly men, this reduces the average male pay and leads to an overall lower gender pay gap.”

If these influences are discounted, the spokesperson adds, Laing O’Rourke’s pay gap is closer to 25-35 per cent.

Bonus pay gap

The new regulations also require companies to report the gender gap in their bonus pay.

Of the 10 biggest contractors by turnover, nine reported a median bonus pay gap of 33 per cent or higher, with Balfour Beatty recording a median difference of 65 per cent.

Galliford Try’s bonus pay gap statistics make for particularly interesting reading. The company paid more of their women a bonus than their men (56.7 per cent vs 45 per cent), but still has a median bonus pay gap of 41 per cent.

Balfour Beatty meanwhile paid 25 per cent of its female staff and 37 per cent of its male staff a bonus, which may go some way to explaining the large gap. The figures also reveal that women make up only 7 per cent and 10 per cent respectively of Balfour’s top and upper middle pay quartiles.

And it is these proportions which represent perhaps the biggest concern for the construction industry.

Analysis by Construction News suggests that, on average, women make up just 9.7 per cent of employees in the top pay quartiles of all construction companies required to report their gender disparities.

The average proportions of women in the upper middle, lower middle and lower pay brackets in these companies are 11.6 per cent, 16.2 per cent and 26.1 per cent respectively.

 

Among the top 10 contractors, Amey, Bouygues UK and Kier are the only ones in which female representation exceeds 10 per cent across all four pay quartiles.

The top pay brackets of Balfour Beatty, Costain Engineering & Construction, Galliford Try, Interserve Construction, Laing O’Rourke, Mace and Morgan Sindall are all less than 10 per cent female.

“That’s not surprising, quite honestly,” says Women into Construction managing director Kath Moore. “We need a systemic change in working practices to encourage more women to come into the industry and to remain and build their careers within it.”

She adds: “Roughly 50 per cent of women who go into the industry are no longer working in it after two years.”

Fixing the pay gap

Working exclusively with mean and median numbers has its drawbacks, but it is hoped that the new system will force companies to improve their gender diversity and reduce the pay gap.

Interserve Construction has a median gender pay gap of 29.7 per cent and the parent group’s director of communications Robin O’Kelly acknowledges that recruiting more women is the only way to fix the problem.

“It’s less about the gender pay imbalance and more about the gender imbalances, which I think is our biggest challenge,” he admits. “It’s about ensuring we have a diverse workforce which is going to be good for the company and we, along with the rest of the construction industry, struggle to get those candidates in at a younger age.”

Like the rest of the top 10 contractors, Interserve is putting into place a range of initiatives and awareness programmes to address its gender imbalance. However, like many construction firms, the company has not set a pay gap target.

For Women into Construction’s Ms Moore, this is not good enough.

She believes every company should set itself a target of eliminating its gender pay gap. “It’s not okay for them to fall short of that; they need to make that commitment,” she says. “That needs to be the aim and they need to do more than just say they’re going to do it; they need to put strategies in place to ensure that it happens.”

For now, the industry’s embarrassing numbers are there for everyone to see.

The only way to close construction’s 25 per cent gender pay gap is to aim for parity on all levels between men and women.

The question now is: can the industry rise to the challenge?

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