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Why the Gender Pay Gap Matters in Real Estate & the Built Environment

Posting date: 3 April 2019
Simon Crabb our consultant managing the role

Could proactive gender recruitment strategies improve company performance?

In the labour market in the real estate and built environment – and, indeed, across all industries in the UK – one of the highest profile topics is the gender pay gap. This year’s RICS and Macdonald & Company Rewards and Attitudes Survey found that the gender pay gap in the industry is closing. However, the survey also highlighted a potential pitfall in the way that the gender pay gap is measured – and one that employers may be using to hide reward bias toward male employees.

Here, we examine the gender pay gap in general terms, consider the findings of the salary checker, and answer the question, ‘Why is it so important for companies in the real estate and built environment to tackle the issue effectively?

’What is the gender pay gap?

Measuring the gender pay gap is not about ensuring males and females receive equal pay. There are plenty of laws covering discrimination that cover such practices and make them illegal. If an employer hires a male and a female to do the same job, the law says that they must be paid the same rate of pay. 

The gender pay gap is a measure of the difference between the amount that males and females earn. In many ways, it is a measure of the fundamental nature of work, informing us about the opportunities available to both men and women among other factors. Why is there a gender pay gap? In a perfect society, it might be expected that men and women receive the same remuneration, perhaps subject to certain criteria. These criteria may include elements such as industry, age, experience and seniority. For example, you would expect a 35-year-old senior manager with 12 years of experience in an accountancy practice to earn the same amount irrespective of whether they are male or female. 

Examined at a national and macroeconomic perspective, at least part of the gender pay gap can be explained by the type of work that men and women do. Female dominated industries (such as health and social work, education and public administration) tend to suffer from lower remuneration levels. Male dominated industries (such as mining, engineering, science and construction) tend to benefit from higher salaries. Part of this dynamic can be explained by historic societal values. 

Men have traditionally been breadwinners while women have been homemakers. When women got married, they were expected to give up work, remain at home and raise a family.This type of society really only began to change during World War II, when the economy and war effort relied on women working in factories to supply the war effort and support those who had been left behind by the men who had gone to fight the enemy. After the war, when women continued to go to work, often this work was either part-time or temporary. It wasn’t until the economic boom of the 1960s that it became more common for women to go to work, and for married couples to have both spouses in full-time work. Still, it has taken another half a century for this to become seen as ‘normal’. Therefore, historically and traditionally, women have been a lesser force in the workforce.In addition, women are still considered to be the ones who will undertake most of the duties of homemaker. 

When couples have children, it is generally the women who will take parental leave, or even leave work to take care of their children. Therefore, women suffer from more career interruptions than men, or work shorter hours. The combination of all these factors is that women have suffered a negative impact on promotion prospects, earnings and bonuses. Even in female dominated industries, it tends to be men who hold the most senior positions with the highest rewards.

What does the gender pay gap tell us?

The gender pay gap is evidence that society is not as equal as we believe it to be. It was a long and hard struggle for women to win the right to vote, to work in professional capacities, inherit wealth and property on equal terms to men, and even to prosecute their spouse for rape. The Equal Pay Act 1970 made it illegal for employers to pay men and women different rates of pay for doing the same work. The gender pay gap may be explained by the previously mentioned factors, but it may also be evidence of subconscious bias. All the equalities won by women have come during the last 100 years or so. Does the gender pay gap indicate that senior executives and managers believe that women are less career-motivated? If this is the case, then the gender pay gap is evidence that it is more difficult for women to get ahead and develop worthwhile careers. This could be damaging the ability of companies to improve productivity and results, consequently holding back the economy.Employing more women could improve your company’s performance. It isn’t merely the desire for an equal society that should encourage companies to close their gender pay gaps. There is empirical evidence that closing the pay gap could help staff retention, and that more women in a business could help to improve performance overall:

New skills and improving productivity 

Christine Lagarde, Managing Director and Chair of the IMF, produced evidence from IMF research that suggests banks would be resilient if there were more women present on their boards. Women bring new and different skills to a workplace, and Lagarde says that gender empowerment could provide “higher growth, a reduction in inequality, an improvement in the strength of the economy and a more diversified, export-focused country”. IMF studies show that the gain could be as much as 35% to the size of an economy. Could a similar effect be possible on the fortunes of companies that actively promote gender equality, and evidence this through gender pay equality?

Workers’ attitudes to inequality are changing

The ADP Workforce View in Europe 2019 survey has found that workers’ attitudes to inequality are changing. This is particularly evident when examining the gender pay gap. The survey collated responses from around 10,000 workers across Europe. It found that people not only expect their employers to report on the gender pay gap in their companies, but are also increasingly likely to look for a new job if they feel there is an unfair pay gap. In fact, 69% of respondents said they would consider looking for a new job in such circumstances. Of course, closing the gender pay gap is not simply about employing more women. It is about seeing those women progress through their career and enter senior roles. How is the real estate and built environment responding to the gender pay gap problem?

The results of the RICS and Macdonald & Company Rewards and Attitudes Survey suggest that the industry is moving in the right direction, but that more effort is required to close the gender pay gap. Across the industry, the survey points to a gender pay gap of 18.6%. However, analysing more deeply, it is evident that some sectors are performing much better than others. For example, the gender pay gaps in the following disciplines are all lower than the average reported in the survey:

• Architectural/design practice –10.86%

• Education – 6.66%

Salary Checker RICS UK
Interestingly, according to the survey’s responses, women working in investment/corporate banking earn around 13% more than men. The findings indicate that awareness of the issues caused by the gender pay gap is improving within the industry. When we consider the gender pay gap at different age groups, it is also evident that the issue is less pronounced as increasing numbers of women enter the industry: 
The fall in the size of the gender pay gap at the 56 to 65 age group may be explained be higher numbers of senior males retiring after they attain 55 years of age.

Strategies companies use to tackle the gender pay gap

Last year (April 2018), some of the largest gender pay gap disparities were reported by construction companies. Large firms including Balfour Beatty and Morgan Sindall reported pay gaps of more than 30%. However, such companies are working hard to close their gender pay gaps, proactively employing more women into senior roles, working with education providers to promote STEM subjects to females, and working with youth groups to increase industry awareness. Examples of such initiatives include:
• Positive discrimination recruitment.
For example, Keir has planned to increase its graduate intake to 80:30 in favour of women.
• Gender balance tracking.
Interserve moved to diverse recruitment shortlists, especially to roles that have been identified as male-dominated.
• Partnering with education providers to promote STEM subjects.
Balfour Beatty is working with schools to encourage more females to take STEM subjects and then seek jobs in the construction industry.
• Working with community youth groups
Initiatives by Amey to partner with Girl Guide groups.
• In-house promotion drives.
Amey, for example, has a Women at Amey network that supports women in engineering roles.
• Supporting returnees
Morgan Sindall’s scheme to support women returning to work after maternity leave.

As can be seen, there are many strategies that can be employed to help close the gender pay gap, encourage women to enter the real estate and built environment, and provide support for career progression and promotion. Such strategies should help to evolve the industry into a more equal and welcoming employment sector and help it to reap the benefits of a more diverse workforce. However, there is evidence that gender remuneration bias is ‘going underground’.

Are bonuses set to be the new gender pay gap scandal?

It is not mandatory to report bonuses in gender pay gap reporting, and it appears some companies may be using the bonus as a method to reward male employees differently to their female counterparts. The RICS and Macdonald & Company Rewards and Attitudes Survey uncovered a trend of higher bonuses being paid to men, with a large disparity at all age groups. 

The bonus gap is 160% at the entry-level age group (males receiving an average bonus of £2,600 versus an average bonus for women of £1,000). This widens to 25% at ages 23 to 26, before rocketing to 66.67% at ages 27 to 30 and 31 to 35. In most disciplines, male employees are awarded higher bonuses than females. A few examples include:

• The average value of a bonus paid to male quantity surveyors is £4,960, 64% higher than the £3,023 paid to female quantity surveyors

• Males in asset management are paid an average bonus over £20,000 – more than four times the average bonus paid to females

• Male architects are paid bonuses that average 64% more than female architects

However, there are also some disciplines in which females are paid higher bonuses than males, such as research, in which females receive average bonuses of £5,375 compared to the average male bonus of £4,200.

What are you doing to close the gender pay gap?

No matter what strategies a company employs to close the gender pay gap, clearly there is no quick fix. However, some inroads are being made and the industry is moving in the right direction. We applaud this and suspect that as more women enter the industry and progress through into more senior roles, the gender pay gap will close further. 

RICS Salary Survey 2019

For this to happen, companies must be proactive in their recruitment and retention strategies, understand the needs and expectations of candidates, and show that they are serious about the careers of all their employees. Equal pay is only the first step. Equal opportunities and equal recognition are equally important to build a truly diverse and highly productive workforce.

As the leading professional recruitment consultancy for the real estate and built environment sectors, and the preferred recruitment partner of RICS, our job is to help employers access the very best talent in the industry and help that talent find the best employer for them. We consider the survey essential reading – it gives us the insight to continue to lead in the field of recruitment. 

To benefit from this insight and learn more of the survey’s findings, get in touch and order your 2019 Rewards & Attitudes Survey.

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