Minding the Gender Pay Gap

More than ten thousand UK firms have recently been required to share information on their gender pay gap, and the results are eye opening if not surprising.

Organisations with more than 250 employees must now publish the information on a public database, the results of which can be viewed here.

The information published includes:

• The difference between the mean hourly rate of pay for male and female full pay employees
• The difference between the median hourly rate of pay for male and female full pay employees
• The difference between the mean bonus pay paid to male and female employees
• The difference between the median bonus pay paid to male and female employees
• The proportions of male and female employees who were paid bonuses
• The proportions of male and female full pay employees in the lower, lower middle, upper middle and upper quartile pay bands

Do you understand the Gender Pay Gap and how it affects your organisation?

Equal Pay is when men and women are paid the same rate for the same work. The Gender Pay Gap is subtly different as it describes the variance in gross hourly earnings for all men versus the gross hourly earnings for all women in an organisation. One of the reasons this remains an issue is that nationally, more men are likely to be in senior roles than women. This gap is not expected to close until 2069.

78% have a gap in favour of men, with just 14% in favour of women.

The disparities exist across all sectors and taking almost any organisation at random paints a similar picture.

What are the implications?

Its worth re-iterating that the findings do not address equal pay, and organisations with a gap are not necessarily doing anything unlawful. Ethically, a company may be able to explain the differences.

However, current and prospective employees can look at a how a company treats differences between men and women. Will this affect their decision on where to work, career choices and likelihood of progression?

The fallout from the BBC case is still causing discord between staff. How will morale be affected when employees are able to point to evidence of long standing suspicions?  The financial services and banking sector is likely to feel this more than most.

Are we witnessing the equivalent to the #MeToo movement for women’s pay?

What can you do?

1. Make Flexible Working the Norm

Working from home, job sharing, and flexible hours can help all employees achieve a better work-life balance and help to reduce the gender pay gap between men and women. As women often take on more responsibility for childcare, flexible practices allow them more opportunity for career progression whilst minimising the impact on childcare commitments.

2. Ensure Having a Family is not a Barrier

Shared parental leave was introduced in the UK in 2015, but not all parents qualify and socially, there is more of an expectation around women to take time off. Encouraging fathers to take up their entitlement will help create more opportunities for women to return to work.

Early years childcare can also be crippling for parents – the average part time nursery place can cost up to £6,000 per year. For some low wage families, it can barely be worth working once travel and other costs are also considered. Expanding help such as free nursery places or having access to on site childcare at some larger employers is already having positive results in some European countries.

3. Plan for Succession

Succession planning is the identification of employees who could step into senior roles when a person leaves or retires. Strategically important, it allows for continuity and business as usual when a role becomes available.

Employees can feel valued, with clear career progression, increasing loyalty and productivity. For women likely to be in less senior roles due to childcare commitments, good succession planning can help to identify those with potential and allow them to reach the more senior positions in an organisation. 

4. Address Cultural Bias

Long standing preconceptions about certain roles or industries may lead to fewer women applying for positions than men – for example in engineering or the sciences. This can reach all the way back to subject choices at school, so get involved in mentoring schemes and encouraging diversity in STEM subjects.

Your advertising and recruitment campaigns can also be designed to challenge assumptions, as well as training to ensure that Hiring Managers do not introduce bias into the hiring process. 

5. Provide Transparency

Not the norm, but increasingly popular in Silicon Valley, publishing salary details for all staff gives everyone the visibility and information needed to ensure they are paid fairly.

Studies have shown that women ask for negotiations around pay less often than men and are received less favourably, so eliminating pay negotiations and bringing salaries out in the open with full transparency can help to reduce the gap.

6. Get Buy In

Buy in from board and senior level is vital to ensure that plans are followed through and do not just become a reporting exercise.

John Lewis, for example, is using the current publicity around the gender pay gap to talk to their employees about flexible working and barriers to job sharing at senior levels.

 What’s next?

Although there is currently no legal obligation, employers can take steps now to review pay practices and career support across the whole organisation, including ethnicity, age and disability. If gaps exist, plans can be implemented to improve the recruitment process to support those with learning conditions or access problems for example.

It’s not just about large organisations either. There is no reason why companies with fewer than 250 staff can’t also take the same steps to start reducing the gender pay gap.

It may take some time, but eventually we can ensure that outdated attitudes and artificial barriers can be torn down.