The Committee notes that the Scottish Government calculates the gender pay gap in Scotland to be 6%, but we are not persuaded that this accurately and conclusively represents the pay gap. The Committee has heard from a range of witnesses that more than one measure is needed to give an accurate reflection of the gender pay gap, and the Committee agrees with this. It has also heard that excluding part-time workers from the calculation discounts 40% of female workers (Annual Population Survey, 2017). The Committee has chosen for the purpose of this report to use the overall hourly pay gap (16%) as a more representative picture of the gender pay gap in Scotland.
The Committee recommends that the Scottish Government develop a suite of indicators to measure the underlying causes of the gender pay gap, using a comprehensive data set.
The Committee recommends that the Scottish Government changes the way it measures and reports the gender pay gap in its National Performance Framework (NPF), to take into account part-time workers in Scotland.
The Committee also asks the Scottish Government to explore the feasibility of comparing Scotland’s pay gap performance with other European countries and reporting progress through the NPF.
The Committee recognises the evidence from McKinsey, CBI Scotland, EY and others on the economic benefits of reducing the gender pay gap. However, the Committee feels that more analysis of the economic benefits of reducing the gender pay gap is needed. The Committee feels that overall not enough has been carried out to demonstrate the “bottom line” improvements as a result of addressing the issue.
The Committee has heard anecdotal evidence of benefits to business, and appreciates the work of the Fair Work Convention on the links between employee satisfaction and increased productivity. The Committee is also of the view that increasing women’s earnings would lead to increased economic stimulus through increased spending. The Committee considers, though, that rather than relying on an extrapolation of the UK figure presented in the McKinsey report, Scotland-specific analysis should be produced.
The Committee feels that a persuasive argument to encourage businesses to take action on their gender pay gap is to clearly demonstrate the wider economic benefits and impact on their bottom lines. The Committee recommends that further research on the business case for reducing the gender pay gap be undertaken in partnership with Close the Gap (Scotland‘s main research organisation looking at women‘s participation in the labour market).
The Committee notes that equal pay claims still exist in Scotland, despite unequal pay on the basis of gender being illegal in the UK for over 40 years and is disappointed that there are still live claims. The Committee recognises that this is a contributing factor to the gender pay gap, and calls on all employers to ensure, by carrying out equal pay audits, that their pay systems do not discriminate on grounds of gender.
The Committee notes that the issues with STEM (Science, Technology, Engineering and Math) subjects and the law are part of a wider and recognised issue in Scottish training and education.
A gendered analysis of education is key to tackling the gender pay gap. The Committee feels that changes are needed in the education system, and intends to write to the Education and Skills Committee with findings in this report, to ask them to consider the issue further in their future work. In doing so, the Committee will draw its attention to the FDM model of attracting women who do not hold a STEM degree into STEM-related work (see paragraph 73).
The Committee is considering further work on the issue of automation, and will look at gender issues related to automation further as part of that work.
The Committee has heard evidence of the business benefits of offering agile and flexible working, and notes that good practice of companies can impact on maternity return rates. The Committee asks the Scottish Government, its agencies, and the Scottish Parliament to ensure that all roles are advertised as flexible, agile or part-time, unless there is a business reason not to do so.
The Committee asks the Scottish Government, its agencies, and the Scottish Parliament to share with the Committee their current practices on advertising flexible, agile, and part-time jobs, to ensure that they are following best practice principles.
The Committee recommends that the Scottish Government collect data on the number of flexible working requests made in Scotland, and which were successful, in both the public and private sector, to gain a fuller picture of the situation.
The Committee recommends that the Scottish Government, its agencies, and the Scottish Parliament ensure their job application forms contain a section allowing applicants to set out if they want to work flexibly and if so, in what way. The Committee encourages other businesses and organisations to do the same.
The Committee notes the impact that simple changes to language and imagery can have, both on broadening the appeal of certain roles, and on expanding the reach of business support services. The Committee notes that changes to language and imagery can be quickly, simply, and affordably made, and challenge perceptions.
The Committee notes the successes of the modern apprenticeship model in providing opportunities for young people and employers alike, but considers that despite significant effort, little progress has been made in addressing occupational segregation within the modern apprenticeships system. The Committee understands that the Delivering the Young Workforce target to “reduce to 60 per cent the percentage of Modern Apprenticeship frameworks where the gender balance is 75:25 or worse by 2021” moved in the wrong direction between 2014/15 and 2015/16. The Committee asks the Scottish Government to inform the Committee how many letters of guidance to SDS have requested action in this area over the years and what outcomes have been achieved as a result.
The Committee will consider as part of its future work programme a further session with SDS to receive an update on work to date and progress on addressing occupational segregation in apprenticeships.
The Committee has heard evidence, from FDM in particular, about the benefits of retraining older workers and the enhanced rates of retention in the STEM sector on doing so. Given this, and the Scottish Government’s commitment to programmes for women returners, the Committee recommends that the Scottish Government consider the successes learned from the modern apprenticeship programme and apply them to create a new programme for returners, with appropriate resources.
The Committee recognises that different solutions are needed for different sectors, and that approaches to returners’ programmes should be tailored accordingly, drawing on best practice examples wherever available.
The Scottish Government has stated that in September 2017 it will publish a new learning and development pathway for childcare workers. The Committee recommends that the forthcoming expansion of childcare learning and development pathway specifically address measures on gender.
It is the Committee’s view that the care sector – including child care and adult/elderly care - is an undervalued but growing and central part of Scotland’s economy. The Committee recognises the impact that improving pay in child, adult and elderly care would have not only on reducing the gender pay gap but also on recruiting a more balanced workforce.
The Committee welcomes the statement by the Minister for Employability and Training that the childcare workforce needs to be “fairly remunerated.” The Committee is of the view that to have a transformational effect on reducing the gender pay gap, serious consideration should be given to increasing wages in care beyond the living wage to more accurately reflect the value of the work undertaken.
It is vital that we raise the status of care in Scotland. As a first step in recognising its importance, the Committee recommends that care becomes a Scottish Government priority sector with a monetary value put on the sector.
The Committee is concerned that the 250 employee threshold for gender pay gap reporting does not capture Scotland’s SME economy. However, given that this reporting requirement is new, the Committee recommends that the Scottish Government monitor and review the number of businesses and employees captured by the reporting.
The Committee is of the view that reporting a pay gap in itself may not lead to change. The Committee notes that at present, employers have the option to provide a narrative around their gender pay gap report, but this is not required, nor is an action plan to reduce the pay gap. The Committee encourages all businesses to create an action plan, and recommends that the Scottish Government put in place guidance to support employers in creating such a plan.
The Committee welcomes the Scottish Government’s 50:50 by 2020 public bodies target but agrees that this is not an end in itself.
The Committee has heard that organic change is required to embed progress. However, the Committee recognises the role that targets have to play in making progress on the gender pay gap issue, and supports their use to produce change.
Given what it has heard on the value of targets in achieving change, the Committee believes that a SMART target in the National Performance Framework on the gender pay gap – specifying what should be achieved and by when – would help focus efforts in this area and recommends the Scottish Government set one.
The Committee notes the potential opportunities around procurement presented not only by the upcoming shift in legislation from the European Union but also in the Scottish Government’s own sustainable procurement duty, as set out in the Procurement Reform (Scotland) Act 2014. The Committee urges the Scottish Government to consider with a view to amending the current procurement regulations to include a question for bidders on their gender pay gap. Bidders could be asked to calculate and submit their gender pay gap, using the formula stipulated in the 2017 Gender Pay Gap Reporting Duty.
The Committee asks the Scottish Government to take advantage of the opportunities presented by the shift in procurement legislation as a result of leaving the European Union, to consider any new legislation in light of the gender pay gap.
The Committee recommends that the gender element of the Scottish Business Pledge is redesigned so that businesses are fully aware of what is required of them. The Committee recommends that this work be undertaken by the Scottish Government in consultation with gender advisers and that the Scottish Government provide guidance to support businesses in reducing the gender pay gap.
The Committee highlights the difference between “actual” living wage employers, who ensure all those working for the business are paid the living wage, and “conceptual” living wage employers, who support the concept of the living wage but do not actually implement it. The Committee encourages all businesses to enter into the letter and not merely the spirit of being a living wage employer. The Committee believes that all businesses should not only strive to be living wage employers themselves but should also encourage those in the supply chain to pay the living wage. (There was a division on the content of this paragraph. See Annexe A, Minute of the Meeting of 20 June 2017 for details.)
The Committee is not persuaded that the enterprise agencies are as fully committed to promoting the Scottish Business Pledge as they might be. The Committee expects to see the inclusion of ambitious Scottish Business Pledge targets and gender pay measures within future business plans.
The Committee recommends that the enterprise agencies require all account managed businesses to have or produce gender pay gap reports and action plans. The Committee also recommends that those who receive significant support, such as Regional Selective Assistance grants, should also be asked to have or produce gender pay gap reports and action plans for their Scottish operations.
The Committee expresses disappointment in the lack of information given in evidence by Scottish Enterprise on the number of account managed companies run by women, and on the potential economic benefit to Scotland of greater levels of female employment and female entrepreneurship.
The Committee believes that all account managed companies and recipients of Regional Selective Assistance grants should be Business Pledge signatories.
From the evidence we received, the Committee is disappointed in the apparent lack of consideration or commitment from the enterprise agencies to addressing the gender pay gap through its work with businesses. The Committee recommends that the Scottish Government clearly sets out what is expected of the enterprise agencies in relation to addressing the gender pay gap and that it monitors their performance in this area.
The Committee notes that the gender pay indicator page on Scotland Performs does not include the enterprise agencies as “partners” in helping the Government address the pay gap. The Committee asks the Government to explain and address this exclusion.
The Committee recommends that the Scottish Government require the enterprise agencies to report on the work they are doing with their account managed companies to reduce the gender pay gap. This activity and progress should be reported through the agencies’ annual reports and fed into the National Performance Framework’s (NPF) “Reduce the pay gap” national indicator.
The Committee recommends that a question on the gender pay gap be added to the RSA application form, as is currently done for the “Invest in Youth” policy.
The Committee asks the Scottish Government and its agencies to review the funding streams available to new and existing female entrepreneurs. Of particular concern to the Committee is the suggestion that male entrepreneurs are more successful in accessing capital than females. The Committee would be interested to hear if this has been the experience of female-owned account managed companies and Business Gateway clients, and recommends the Scottish Government and its agencies undertake research in this area.
The Committee heard evidence about the importance of mentoring to new and existing female business owners, and recommends that the Scottish Government reviews existing opportunities available to female entrepreneurs across the whole of Scotland with a view to enhancing support wherever possible.
The Committee recognises that the reasons for the gender pay gap are deep-seated and wide-ranging and need to be tackled in a number of policy areas, including education, skills, childcare, procurement, business support, and the work of the enterprise agencies. Therefore, the Committee recommends that the Scottish Government produce an overarching strategy to address the gender pay gap, including an action plan and measurable targets.
The Committee acknowledges the willingness of the Scottish Government to address the issue, and feels there is an opportunity here for Scotland to become a world leader in reducing the gender pay gap. This report and the Committee’s recommendations are intended to set the groundwork for this.