How concerning is the wage gap in the construction sector?

Since the government first published the draft regulations on gender pay gap reporting on the 12th February, employers have been determining what it means for them. So how bad is the wage gap in the construction industry?

Earlier this year we asked employers from a range of sectors for their estimated pay gap figures. The results (shown in the infographic) show an average pay gap of 20% across the UK, which is comparable with the 19.4% quoted by the Office of National Statistics (Annual Survey of Hours and Earnings) for both full and part-time employees. However, looking at sectoral variations, construction was one of the worst, with an average pay gap of 28.9%. This is no real surprise, given the perception of construction as a historically male-dominated profession. However, by digging a little deeper, some underlying issues exist that may help to explain the wide gap.

In the spring edition Paydata’s UK Reward Management Survey, only 41% of employers confirmed measuring gaps in gender pay, compared with just a third within construction. A similar percentage (39%) had never conducted an equal pay audit, compared with over half (54%) in construction. This would suggest that construction has been slower to recognise equal pay as an issue than other sectors. This may be due to the lack of formal job grades in the sector, a necessity for being able to conduct an accurate equal pay audit. In addition, naturally there has been an historic fear of addressing what could be a sizeable and costly problem.

Yet attitudes within construction appear to be changing, since the second gender pay gap consultation in February and the subsequent coverage of gender pay issues in the popular press. Provisional results, from the latest running of our UK Reward Management Survey, indicate that over two thirds of construction employers are now measuring gender pay differences, a significant increase on the third of employers quoted earlier in the year. However, until the gender pay reporting requirements are finalised most (69%) admit they still do not report on gender pay.

A key factor affecting the pay gap in construction is the under-representation of women in construction jobs, particularly at a senior level. Looking at our pay database which covers over 24,000 individual jobholders, fewer than 15% of the employed workforce are women. Indeed, most women are employed at base professional or junior levels. Above this (senior quantity surveyors, site managers, etc.), less than 5% of the workforce is made up of women. At Director level (Project Directors, Commercial Directors, Design Directors) 3.5% of the workforce are women. These numbers have a profound effect on the overall gender pay gap figures that construction employers will be required to publish.

Our latest figures show that although there is much work to do, the industry is starting to address this latest challenge. 85% of construction employers state that they are making plans to implement the gender pay reporting legislation, with almost a quarter saying they have completed overall planning and 31% stating they have completed work to ensure their internal systems can produce the data required. However, only 15% have conducted an equal pay audit to understand their data trends and only 8% have a communications plan in place to explain the inevitable gender related gaps in their figures.

Before this year, other industries appeared in a better state both in terms of their pay gap figures and having the systems, grading and resources in place to meet the reporting requirements. However, our latest research shows that other industries have lagged behind in their preparations for gender pay reporting implementation (for example, only 18% have completed planning work on their internal systems and only 12% have conducted an equal pay audit). Perhaps this is because the construction sector has more work to do to close the gap.

So what will it take to close the gap? Unfortunately there are no quick fixes; it will take time, resources and money to address decades of under-representation in the industry. The priority for employers will be to understand whether they have an equal pay issue, as this is likely to be the biggest financial and reputational threat. The only way to examine this is to conduct a detailed and accurate audit, which will take time and resources and buy-in from senior management. The advantage of doing this though is that it will help employers write a commentary to explain what is driving their figures, and what they intend to do to address any issues.

Ironically, the overall pay gap figures in construction may get worse before it gets better, if employers attract more women into apprenticeships and graduate programmes.

By Tim Kellett, Director at Paydata

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