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Gender pay gap: Family businesses vow to do better

By Alexandra Newlove

With just days to go until all major UK employers have to reveal the difference between what they pay men and women, several of the country’s biggest family firms say they are committed to doing better.

Pentland Brands, which has won a slew of family business awards in recent years including the top honour at CampdenFB’s 2014 European Families in Business Awards, revealed its median pay rate for women is 5.9% higher than men, though women’s mean rate of pay was 18.4% lower.

In 2017 the UK government introduced regulations requiring businesses with more than 250 employees to publish their gender pay gap and gender bonus gap by 5 April. So far, just under 6,000 companies have reported, of an estimated total of around 9,000. The UK has a national median pay gap of 18.4%, as of April 2017, according to the Office for National Statistics.

Pentland, which is owned by the Rubin family and has turnover of £2.9 billion ($4 billion), said in a statement its 18.4% mean gap reflected “disproportionate representation of men in our senior leadership population”.

“Viewed alongside the median measurement—where women’s pay is 5.9% higher—we are clear that our challenge is in increasing the number of women at the highest level of our organisation. In this reporting period, our chairman, CEO and 75% of our executive team were male.”

Figures are reported as mean and median. When it comes to gender pay, the mean—or average—often reflects the usual trend of more men in senior positions, whereas the median (in this case the middle earner of all men and all women) arguably better reflects the pay rate for the “average Joe” worker of each gender within a company.

Another UK family business giant, the Clark family’s Arnold Clark Automobiles, reported its median man was paid 10.9% more, while men were paid on average 14.8% more. Looking at its finance division in isolation, women were paid more, though the company’s total workforce was 76% male.

Eddie Hawthorn, chief executive, pledged to increase the number of women working for Arnold Clark, which turned over $5 billion in 2017, by 5% over the next three years.

The $4.6 billion-a-year 2 Sisters Food Group, owned by the Boparan family, reported a median gap of 6.9% and mean gap of 15.3%.

It too said the gap was driven by disproportionate numbers of senior men.

“With an ever-increasing focus on the issue of gender, the business is pleased to be able to publish its gender pay gap analysis which we believe stands up very well against the manufacturing industry as a whole and in particular the food and drink sector,” the company said.

“Creating an environment in which both men and women can reach their career aspirations is vitally important to us. There is always more to do, and we look forward to making sure we look at new and different ways to reach our goals.”

Michael Maslinski, partner group head of strategy and know how at Stonehage Fleming, said there was a growing trend in family businesses for women to become more involved, often in leadership roles.

“It is true that in many families the business has, historically, been mainly the preserve of men, but this is changing and in some families it is now taken for granted that men and women are treated absolutely equally,” he said.

Maslinski said women often had a positive impact on company culture.

“Successful families and their businesses understand the need to adapt to a changing environment and the presence of women in leadership roles is part of that change.”

Maslinski said the published pay gap could be misleading unless compared to other comparable businesses.

“It is often difficult to assess to what extent any published gap reflects gender discrimination, rather than the nature of the business. Most family businesses are very alert to the issue and are working to eliminate unjustified differentials for genuinely comparable work,” he said.

There have been numerous criticisms of the government’s reporting standards. Base pay is calculated by working out a per-hour wage, while bonus pay is not calculated on a pro-rata basis. Because more women work part time, the bonus gap between men and women may therefore be overstated.

With more than 3,000 still to report, companies are waiting until the final few days to file their figures, with some commentators saying this is part of a strategy to get lost in the deluge of last-minute filings.

Peter Cheese, chief executive of the Chartered Institute of Personnel and Development, told the Financial Times there was school of thought that went “maybe I should hold off and when there’s the big tsunami of companies reporting I’ll bury it into that”.

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