Misleading statistics in the wild
April 5th has many finance departments rushing in the UK. It’s the last day of the tax year. In the past two years, another department has started feeling the pressure. Since 2017, all UK companies over 250 employees must provide a report on the Gender Pay Gap within their company.
Companies are free to report their statistics in their own format, but must cover the following:
- Their mean gender pay gap
- Their median gender pay gap
- Their mean bonus gender pay gap
- Their median bonus gender pay gap
- The proportion of men in the organisation receiving a bonus payment
- The proportion of women the organisation receiving a bonus payment
- The proportion of men and women in each quartile pay band
The results are insightful. Men and Women may generally earn the same amount for the same work, but promotion to the high earning jobs is still not equal.
Amidst this safari of statistics, there sights to see. As expected, some companies are manipulating the numbers.
Others, are a victim of statistics. Sweaty Betty is one example. Sweaty Betty makes high end sports clothing for Women. They aim to “inspire women to find empowerment through fitness”. It’s no surprise to learn that 99% of their company are female. According the to the Goverment page:
In this organisation, women earn 33p for every £1 that men earn when comparing median hourly wages. Their median hourly wage is 66.6% lower than men’s. This headline is a fantastic example of a misleading statistic. Taken in isolation, Sweaty Betty look like they have a large gender pay gap. How can this be for a company dedicated to supporting women?
The answer lies in the next statistic. Women make up 100 % of the Lower, Lower Middle and Upper Middle Quartile. They make up 96% of the Upper Quartile. The only men at the company exist in the Upper Quartile.
The goal of the gender pay gap is to highlight the gap that exists today. No one would accuse Sweaty Betty of a gender pay gap, yet a lazy glance would raise eyebrows.