Posted by Sarah Nash on 31 March 2023
5 years of gender pay – What have we learnt? What has changed? How can we progress beyond headline reporting?
Once every year thousands of companies are required to publish their new gender pay gap figures, and that ‘snapshot’ date has just ticked over for 2023. For most public authority employers, the clock strikes at midnight on 30 March and for everybody else the figures are due five days later at midnight on 4 April.
Since reporting started, the median gender pay gap has decreased by 3.1% - from 17.8% in 2018 to 14.9% in 2022, meaning that women now earn on average 85p for every £1 earned by men. Looking at the issue globally, according to a World Economic Forum Gender Gap Report published in July 2022 the UK’s gender pay gap ranking is 22 out of 146 countries, with Iceland, Finland and Norway topping the table with the smallest pay gaps. At the current rate of change, the report also suggests the gender pay gap will take 132 years to close completely.
The causes of gender pay gaps are deep-rooted, created over decades. Historically, women came into the workforce later than men, and role stereotyping sent women in one direction (part-time administrative, support and care functions) and men in another (leadership). The historical parental penalty that women have continued to face means that female progression into managerial and leadership roles has been slower. The proportion of women on FTSE 100 boards currently stands at 39%.
Equal pay is the legal requirement under the Equality Act 2010 that requires employers to give men and women who are doing a similar job the same amount of money. The gender pay gap refers to the difference in average earnings between all men and all women so, although the figures don’t relate to equal pay for equal work, they do shed light on structural inequalities in the workforce. Gender pay gaps are often caused by distribution: an over-representation of men in the highest-paid roles, while more women fill the lower-paid roles. This differential creates the gender pay gap.
What has changed?
Firstly, HR teams have become more aware of the importance of unbiased recruitment practices, which has welcomed a new wave of enlightened thinking. Extra care is now taken not to affect an application pool by using gender-biased language. HR as a whole is using a wider lens when looking at where to advertise, how to appeal to both men and women and also to attract people from different backgrounds.
A greater number of organisations are now developing a DEI (Diversity, Equity & Inclusion) Strategy as they recognise the benefits of a diverse workforce. These can be financial but touch many other areas such as creativity, problem-solving, reputational, increased productivity, innovation, employee retention and enhanced engagement with the customer.
We are also seeing changes to parental leave policies, allowing men and women to equally partake in childcare should they wish, or allowing the man to take on this role for a prolonged period, or full-time.
How to go beyond headline reporting
Voluntary Narratives – There is genuine power behind a company accepting that a gap exists and building a narrative around the gap: an explanation of why it exists and an action plan to narrow the pay gap. When this happens, the narrative and the explanation become as important - if not more important - than the published figures.
Producing an Action Plan – Do not hide from a wide pay gap. Instead, provide an action plan which illustrates the commitment of key stakeholders and leadership to narrow it. Include steps already taken and the impact that these have had.
Initiatives to attract females - In sectors and industries that are typically male-dominated and where the pay gap tends to be the largest, organisations are implementing initiatives to balance out by recruiting, promoting and retaining top female talent.
Flexibility – These initiatives include having a more flexible approach to staff opportunities, particularly around levelling up maternal and paternal leave. Re-entering the workplace after maternity leave is a key area, along with enabling shared parental care duties. Flexible working is another important asset, enabling part-time work without it signaling a demotion, although certain roles lend themselves better to this than others.
Policies & Practices Review - Implement practices that bring parity and fairness for all gender identities. This involves reviewing HR policies and procedures to ensure that pay for men and women is fair, for example starting salaries for a particular role at the same level, regardless of gender. Also review how promotions and pay increases are happening: are there proportionate percentages of men and women being promoted? Are men and women progressing through the organisation at a similar rate? Is sound logic being applied to pay rises where negotiation is happening, or where experience and flight risks are being considered?
Get Ahead – When the annual snapshot date of 5 April arrives, your Gender Pay data is set in stone and cannot be changed. By putting off analysis until January 2024, you give yourself less time to tackle inequality. If we receive client data in May 2023, we can get the analysis of those numbers back to them by the end of the summer, leaving ample time to do further analysis and set new policies to come into effect in April 2024. If you leave it until the new year – as many organisations do – you run out of time to effect and influence change.
There is still a long way to go.
More insight from Sarah Nash
Rethinking your long-term talent strategy to address pay gaps
What is the future for gender, ethnicity, and other pay gap reporting?
