Avoid the gender pay gap: become a contractor!

The gender pay gap continues to be in the news – especially as figures were published at the start of April showing the gap had actually widened.

This is the second year companies with 250+ employees have had to submit figures showing the difference between what they pay men and women, calculated by taking all employees and comparing the average pay between men and women.

The latest figures show that overall, 78% of companies paid men more than women, and across 45% of firms that discrepancy had increased in favour of men over the last 12 months. The ‘median pay gap’ – calculated by comparing the difference in pay between the middle-ranking woman and middle-ranking man in the same company – had actually shrunk by 0.1% to 9.6%.

Now while these numbers are disappointing, it’s worth remembering that they’re based on permanent employees – but what about contractors? They’re one of the fastest-growing sectors of the workforce, up 25% in the last 10 years and adding an estimated £109bn a year to the UK economy, according to contractor trade body IPSE. The Pensions Policy Institute also found women made up 97% of the net increase in self-employed workers last year; so do contractors still see a pay gap?

With no official figures, different organisations have looked at various data.

The IPSE reports 59% of contractors are male and 41% female, while Contractor UK found the top three sectors – Automobile, Construction and Engineering – had 81%, 94% and 79% male contractors respectively (although you’d expect that in such historically male-dominated industries).

Jobs platform Yuno Juno’s research showed that in creative industries, for example, men’s average day rates were around £15 (5%) more than women, and up to £50 higher in creative, design, UX and film – while women can earn more in strategy and client service roles.

On the other hand, online services platform Bidvine say the average freelancer and contractor gender pay gap shrunk to an average of 1.9% in key UK industries, compared with the 9.6% for permanent employees. In fact, in areas like photography and language and music teaching, freelance and self-employed women earned more than men.

And unusually, Contractor UK’s own database revealed the average daily rate of a male contractor was £404, and £408 for women.

Is contracting the answer to the gender pay gap then?

It’s a fact that limited company contractors have greater control over their work, the clients they work for, the hours they work and how much they’re paid. They can set their own rates, making sure they’re fairly paid for the work they do regardless of gender, age or experience as long as the client feels the cost is justified.

But of course, it’s not an option for everyone. For those in the right role who can make it work for them, it’s fine; but most people will have to wait for employers, government and society in general to close the gender pay gap over time.

What’s your own experience of the gender pay gap? Has it caused problems in placing candidates? What do you think would have the biggest effect on narrowing it? Join the conversation over on LinkedIn and Twitter #BackOffice!

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