Mind The ‘Gender Pay’ Gap
If you are one of the 8000+ organisations that employ 250 people (or more) in Great Britain, when you are required to publicly declare your organization’s ‘Gender Pay Gap’ to the UK Government Equalities Office by the 4th April each year.
Companies are likely to come under increased scrutiny to narrow the gap in 2019. Figures from the Confederation of British Industry’s (CBI) employment trends survey* indicate 93%, up from 62% in 2017, of businesses are taking action to close their gender pay gap.
Search, compare and report your Gender Pay Gap on the UK Government website here: https://gender-pay-gap.service.gov.uk/
Our People & Change specialists look at one of the most important recent developments in UK employment law, the implications for employers and what you can pro-actively do to close the gap.
Gender equality is firmly on the agendas of boardrooms across the UK and internationally. With the wider diversity and inclusion initiatives generating traction, impacted companies have a number of key questions to consider:
1) Do you know what your gender pay gap is and how this is likely to be perceived by employees, customers and the media?
2) Can you easily access and compile the required data without substantially adding to your existing reporting overheads?
3) Have you given thought to how you will publish the report?
4) Have you considered what talent attraction, development and retention initiatives you could put in place/upgrade to bring in and keep women at all levels of the business?
If you answer ‘no’ to one or any of these questions, what action is available to you?
1. Understand your data…and what it means
Review how the calculations should be made, what data is required, which of this you can easily obtain for your company and what will take more time and effort to gather. If you were able to calculate the pay gap for your company right now, using the Government’s methodology, what does the data show?
What other factors might be at play in the results? For instance, there is evidence to suggest this is not a one way street – in some age groups the issue is with men being paid less pound for pound. Do your existing practices, polices and culture impact the findings? Monika Queisser, Head of Social Policy at the Organisation for Economic Cooperation and Development, has said research showed the gender pay gap was smaller in countries that offered better public childcare and parental leave arrangements.
“As you consider your game-plan, think about the broader context of gender strides achieved over the past decade or so in your industry”
2. Consider the big picture
An increasing number of companies are getting ahead and publishing their pay gap far in advance of the deadline, aligning it to other organisational initiatives such as the release of their annual report. It is important that companies develop their own strategies based on industry trends, company size and location, and the underlying rationale behind why there is a gap in their organisation. This will enable them to develop a strategic that is bespoke to their needs and fit for purpose.
We’d advise that this requirement is viewed as an extension of your ‘people strategy’. What will this data tell you about your organisation? Are there actions that could be taken now to address a less than impressive pay gap for either gender? What do you want people to understand? How could you align the publishing of this information with other company initiatives – for instance, broader diversity activities, leadership development, training, work-life balance or company practices and policies?
You might also want to consider the context of your specific industry – different sectors have a history of being more balanced in terms of gender representation, whilst some are less so. Should that always be the case? Or is it a result of unconscious bias, with leaders hiring and promoting on the basis of ‘people like me’? As you consider your game-plan, think about the broader context of gender strides achieved over the past decade or so in your industry to put your findings into context.
3. Build the findings into conversations on talent retention and attraction, hiring and other people processes
Although views may differ on how equality in the workplace should be tackled (across all dimensions, not just gender), within virtually all FTSE100 companies (or those that aspire to get there) topics such as sustainability, talent retention and succession planning are at the forefront of C-suite discussions. It is a rare (or rarefied) corporate culture that isn’t considering how to address these and stay relevant in the future —and many forward-looking organisations are eager to be seen leading on these initiatives. The findings and impacts from your pay gap data should be considered alongside these perennial topics.
4. Make a proactive decision – Do you see this as a tactical, compliance and monitoring activity? Or, could it be a wider signal to your customers, employees, policy-makers, investors and media of your approach to diversity, inclusion and competitiveness?
The debate about gender pay is just one element of a broader discussion. The very nature of how British companies operate has changed dramatically over the past few decades. Whilst this could be seen as a forcing function to drag some kicking and screaming into the 21st century, it could also be a means of encouraging employers to measure so they can better manage.
This discussion also raises the question of what more can, or should, employers do to support diversity overall – from employees setting their own working hours at Netflix; to helping those with carer responsibilities or religious observances; to increasing paid leave for parents of any gender (and providing a supportive re-entry back into the workplace). This also raises overall pay and bonus transparency questions for senior executives and the seemingly increasing divide between the Haves and the Have-Nots.
iFigures compiled by the Press Association based on ONS stats have shown that between the ages of 22 and 29 a woman will typically earn £1,111 more per annum than her male counterparts.
“The war for talent rages, and having clear policies and processes to support diversity is another means of an organisation evidencing that it can differentiate itself in the marketplace.”
It’s important to note that while the ‘Gender Pay Gap’ rulings are the latest government regulation to support diversity
in the workplace, they will no doubt not be the last…and in the workplace, they will undoubtedly be the last (particularly with the Ethnicity Pay Gap currently wrapping up the consultation process)..and that there are mixed findings on the success of other diversity driven initiatives such as quotas.
The war for talent rages, and having clear policies and processes to support diversity is another means of an organisation evidencing that it can differentiate itself in the marketplace.
FTI’s People and Change team have broad industry knowledge and a deep understanding of change management to help guide leaders through these kinds of questions.
Having worked with clients to support diversity and inclusion programmes, merger integrations, acquisitions, restructures and changes in strategy and leadership, we understand how to engage, inform and stabilise a workforce.
All employers impacted by gender pay gap reporting will need to comply with these regulations, and forward thinking employers should also consider the bigger picture on what this means for their talent, reward, communications and engagement strategies….Mind the ‘Gender Pay’ Gap.
Lucy L.M. Phillips and Alison Minns
Lucy L.M. Phillips is a Managing Director in the People & Change Communications practice in London and is Prosci®certified in Change Management.