UK energy sector gender pay gap report allows firms to reflect and improve

Analysis carried out by Pinsent Masons shows that the UK energy sector’s median hourly gender pay gap has improved, on average, by 1-2%, with most operators showing a year-on-year improvement since the GPG reporting requirement was first introduced in 2017. The data also shows that some energy companies have reported an improvement of up to 5% in their median hourly gender pay gap.

Gender pay gap reporting requirements

Since 2017, employers across Great Britain with more than 250 employees have been required to publish their overall mean and median pay gaps on an annual basis. The published data is based on gross hourly pay for men and women, expressed as a percentage, with employers also required to publish their mean and median gender bonus gaps.

Firms must also publish data on the male and female employee split within each quartile of their pay distribution, ordered from lowest to highest pay, as well as the proportion of men and woman who have received a bonus in the preceding 12-month period.

Companies caught by the reporting regulations are encouraged, but not obliged, to publish a narrative alongside their yearly figures to provide some context and an explanation on their progress and plans to address any disparities highlighted by the data.

The latest gender pay gap reports from the UK energy sector

Pinsent Masons’ analysis found that, in the latest reporting year, approximately 69 energy employers reported on their gender pay gap via the government portal. This is an increase on the equivalent figures recorded by the sector in the previous year.

The data published by the companies which reported shows that women working for large energy companies are paid approximately 14.8% less per hour than men. This is roughly on a par with other industries and sectors. This is a decrease of 0.7% compared to the average gap reported last year.

The data also shows that, on average, there is a 5.2% difference in the median bonus payments to men compared to women. This is at the lower end when compared with other sectors, and is a decrease from 18.9% during the previous reporting period.

The figures show that many operators are demonstrating year-on-year progress since the reporting obligation was first introduced. For instance, the median hourly gender pay gap has improved by up to 2% for some organisations, with several energy companies reporting improvements of up to 5% in their median hourly gender pay gap.

Underlying causes of the UK energy sector gender pay gap

It is widely recognised that there is a shortage of women working in the science, technology, engineering and mathematics (STEM) sectors. Whilst efforts are being made at the recruitment stage to balance this, these efforts are yet to make a significant impact, particularly at a more senior level.

This is widely recognised within the energy industry where only one third of entry level employees are female – this is a smaller proportion compared to other STEM sectors.

Just four per cent of the top 80 energy companies in the UK have a female chair of the board, with more men in higher paid technical roles across the sector. A greater proportion of women work in customer service and administrative roles, which are typically lower paid. Traditionally, more women work in part-time or flexible roles than men. While this does not impact the gender pay gap, it can affect the bonus gap.

Job specific factors are also relevant to the cause of the pay gap, particularly where more men typically earn additional call out and unsociable hour allowances compared to women. This is particularly the case within oil and gas, where offshore workers, the majority of whom are male, earn offshore allowances, travel allowances and other additional payments to reflect the rotational working pattern.

How energy companies are addressing the gap

Companies across the UK energy sector are taking various steps to address the gaps identified, including a range of inclusion initiatives and strategies.

Employment law expert Sarah Munro of Pinsent Masons said: “As a result of energy transition, there is a real focus on retention and recruitment within the energy sector. Our clients are working hard to ensure that there is better awareness of the types of jobs available in order to attract women to the industry and then to stay in the industry, and move away from the view that it is a ‘male dominated’ sector”.

The most common actions taken include promoting dedicated leadership programmes, introducing STEM activities, mentoring, and setting diversity targets. These actions were some of the most prevalent in companies which have seen up to a 25% decrease in the gender pay gap since 2017.

Some companies are also promoting family friendly policies including hybrid working, and offering more support to employees on parental leave. Some businesses are also offering ‘career story’ events delivered by female employees, as well as development workshops offered to all employees.

Companies are also beginning to implement more inclusive recruitment initiatives. Munro said: “There are lots of good news stories of energy companies enhancing their STEM education programmes with a view to engaging a wider range of people who may not previously have thought that the energy sector was for them”.

Harbour Energy’s ‘STEM Returners’ programme has particularly appealed to women, who make up 100% of the STEM Returners who have received full-time roles following internships. ScottishPower offers a ‘STEM Ambassador’ programme which aims to engage with thousands of young people with opportunities and initiatives throughout the year.

It is clear that energy companies have recognised that there needs to be a higher awareness of the types of jobs available in the sector in order to attract, encourage and retain women in the industry.  This will, in addition to many other benefits of a more diverse workforce, help to close the gender pay gap.