What Britain's Yawning Gender Pay Gap Really Teaches Us

(Bloomberg Gadfly) -- Dismal, depressing, and even worse than we thought. The results of the U.K.'s first compulsory survey into the gender pay gap are in. But what do they add up to, other than a cause for outcry and corporate squirming?

The early reports at least had novelty value, with first movers, such as EasyJet Plc, getting more time than they wanted to explain in public why they paid male employees more than women. As further disclosures trickled in, the relentlessness of the pay gap became clear. Companies with big disparities shame-facedly tried to mitigate the damage by saying they were doing everything they could to foster a culture of inclusion.

With the deadline behind us, the data are less exciting when taken as a whole. The overall median gender pay gap looks to be about 10 percent. That's awfully close to what we already knew from the Office for National Statistics' Annual Survey of Hours and Earnings. The latter has the substantial advantage of providing further data to show how part-time work, age and occupation result in lower pay for women.

The government survey does little, at first glance, to help investors establish a correlation between gender diversity and performance. Take the grocery industry. The fast-growing German discounters, Aldi and Lidl, have the lowest median pay gap -- but embattled rival J Sainsbury Plc isn't that far off. Tesco Plc has a bigger mean pay gap and yet its shares have outperformed Sainsbury over the past year.

What Britain's Yawning Gender Pay Gap Really Teaches Us

The government data are indeed blunt. But it doesn't follow that they're devoid of new information. For one, the breakdown of pay quartiles highlighted how women occupy a higher proportion of lower-paid jobs across U.K. Plc yet don't reach the upper echelons.

This is crucial information for someone starting her career. Now, there's more transparency about what progression she can expect. People don't choose to work for a data point in an ONS survey, they choose to work for a company.

A woman just out of university with an aim to make it to the C-Suite of a major investment bank now has a better picture of where's the best place for her to work. Of course, she would know without looking at any data that it's going to be a tough climb because she's a woman. But the path might be more open at HSBC than at Citigroup. And whatever Citigroup tells her in her interview, she would be well within her rights to challenge the bank about how committed it really is to women's careers compared with HSBC.

What Britain's Yawning Gender Pay Gap Really Teaches Us

The real worth of the exercise will come in the next few years. That's when we'll be able to see the rate of change, and that's how employees and investors can hold companies to account. It's a pity that the U.K. government failed to ask companies to provide back data so that everyone could see the trend. A show of improvement would lend a lot more credence to some of the corporate hand-wringing on display now.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Jennifer Ryan is a Bloomberg Gadfly editor. She previously reported on economics and corporate finance for Bloomberg News in London and New York.

To contact the author of this story: Jennifer Ryan in London at jryan13@bloomberg.net.

©2018 Bloomberg L.P.