Gender Pay Gap – One Year On
It’s been just over a year since companies in the UK had to start reporting on the gender pay gap within their organisations. The latest reported figures show that 77 per cent of businesses pay men more than women, whilst on average women earn almost 18 per cent less than men1.
Why is the gender pay gap so important to talk about?
For a number of reasons, closing the gender pay gap is beneficial for both businesses and society as a whole. Studies show that companies with greater gender equality perform better, are more resilient; and have a stronger employer brand, which aids recruitment2.
The perception of gender fairness in pay was highest for organisations at the top of The Sunday Times Best Companies list, lower for organisations further down the list, and lower still for those that failed to qualify. Within the data that we collect, the best performing organisations are transparent about their gender pay gap and are keen to address any concerns with pay. The companies that shared their gender pay gap figures with staff make up 80 per cent of our top ten companies, reinforcing just how important this topic is. Only 49 per cent of unlisted companies adopt the same approach.
Gender equality within the workplace also creates a fair and equal society – it’s been estimated that the UK could see its GDP increase by nine per cent if the gender pay gap was closed2.
Adapting your approach
A lot of organisations are aware of their own gender pay gap, but many are unsure how to tackle the issue to really make a difference within their organisation. The Government Equalities Office published a report that details evidence-based actions to help employers reduce the gender pay gap; the first step focuses on recruitment and promotions3. By identifying barriers and opportunities to be more inclusive, this will encourage diverse talent to apply for roles you have available. Where possible, it should be encouraged to include multiple women in shortlists for both recruitment and promotions3.
During the interview process, you could use skill-based assessment tasks to ensure candidates are judged on their performance and how suitable they would be for the role. Another recommendation would be to use structured interviews for recruitment and promotions. This would reduce the risk of bias influencing the outcome3.
It has been suggested that females are less likely to negotiate their pay. However, if you share the salary ranges for each job role, you can help individuals identify what a reasonable offer for the job role is. Clearly communicating the salary range, can help manage expectations and enable candidates to negotiate a fair salary3.
Once you have great employees, the next step is to ensure you can keep them happy in your workplace. Our research found a positive relationship between providing opportunities for career progression and female employee retention. This suggests that personal development is key to retaining female talent and helping them progress up the career ladder will be more successful if your organisation encourages this.
Some other actions which can help improve equality within your workplace could be improving workplace flexibility for both men and women and encouraging the uptake of Shared Parental Leave. According to the Government Equalities Office, the gender pay gap widens dramatically after women have children, but this gap could be minimised if men and women were able to share childcare equally3. Our results show highly engaged organisations are keen to further their employee’s work-life balance and offer accommodating benefit packages such as flexible working, school hour contracts or maternity leave. Over two hundred and fifty accredited organisations offer at least ten weeks of full pay within their maternity package or a generous alternative.
Beyond the gender pay gap
For all of the suggestions mentioned above, these initiatives should have time-bound targets4. Setting targets will keep you focused on these initiatives and will allow you to monitor your progress. We acknowledge there will be different challenges for different organisations when discussing the gender pay gap, but you can implement an action plan that focuses on the areas your organisation can improve. When developing this action plan, you should analyse your data to identify what is causing your gender pay gap. There will be different reasons for different organisations. Sometimes, there are industries more dominated by males than females and vice-versa. Similarly, it could be that certain roles within your organisation are more appealing to one sex than the other. Another possible explanation might be that one sex is more likely to take on more caring roles than the other sex within your organisation. Whatever the reason may be, once you have identified the reasons for the gap, you can reflect on the employee lifecycle and document actions that can be taken to overcome any obstacle.
Next, you will need to engage the organisation to implement these changes. Managing any diversity problem begins with an active commitment from leadership to be more inclusive. An inclusive workplace that offers the same opportunities for growth and progression to all members of staff, irrespective of gender or anything else, has to start from the top.
The Senior Leadership Team and relevant stakeholders will need to understand the problem and know what steps are needed to achieve the desired outcome.
Once the proposed actions have been embedded into the organisational culture, you should monitor, report, and evaluate these actions to ensure you have achieved the desired outcome4. Respondents from top-ranking companies in our Best Companies lists believe the policies and procedures within their organisations are fair to everyone, which suggests inclusivity and diversity are important aspects of organisational culture. By embracing the voice and ideas of all staff – regardless of gender – and incorporating those ideas into the ethos of your company, it encourages people to come forward with different and diverse perspectives. The impact of that can be fantastic for the future of an organisation, and it’s a trend we’ve seen from so many of our top-rated Best Companies.
Best Practice Examples
Some of the organisations we work with have already adopted such strategies to reduce their gender pay gap. Explore Learning, who came 2nd in The Sunday Times 25 Best Big Companies to Work for List, introduced pay spines in early 2017 to promote their transparency of pay, ensuring employees are equally paid for the jobs they work in whilst removing any opportunity for bias. Since last year, Explore Learning’s mean gender pay gap has shifted from 4.6% to -1.5% (inferring women’s hourly pay is now 1.5% higher than men’s). The change in the pay gap is attributed to achieving a gender balance within the Senior Leadership Team, and to 75% of the organisation being female. To further reduce any discrepancy in gender pay, Explore Learning plan to review their staffing model to allow greater flexibility within their roles to attract a more diverse workforce. This emphasises their commitment to achieving equality through-out their business.
Auto Trader have recognised that there is an under-representation of women in certain highly-paid functions, including leadership roles. To combat this, the company has established a ‘Diversity and Inclusion Guild’; led by members of the Operational Leadership Team, the Guild is made up of employees from across the business, and is responsible for developing and driving strategy to create a diverse and inclusive company. This year, Auto Trader’s mean hourly pay gap shrunk by an impressive 3%, with 44% of all internal vacancies, and 46% of all external job offers being accepted by women. The company also offers 20 weeks’ full maternity pay for all job grades and are encouraging more people to take advantage of the flexible working practices we offer including part time hours, job share and flexible hours.
Great Ormond Street Hospital Charity have implemented policies that are designed to redress lower numbers of women at director-level and entry-level to the charity. Flexible and family-friendly working arrangements are in place for all staff, and coaching is available for those returning from a prolonged period of absence (regardless of gender) so that the absence does not affect their progression and development. An all-staff presentation on the gender pay gap was followed by the charity encouraging staff to raise any feedback via their staff reps or another confidential route. Staff welcomed the openness and honesty of communication, and expressed an eagerness to see more focus on the flexible approach to working, in particular wanting a consistent message given to all teams. This has been a key objective for the charity since the feedback was collated and significant progress in this area has been made.