Seven years have now passed since gender pay gap reporting was first made mandatory in the UK and nobody could deny that issues of gender distribution in business remain the same: in simple terms, there are more men at the top and more women at the bottom. This imbalance tends to be the root cause of most pay gaps and while it doesn't necessarily follow that pay is unfair, it does point to some broader, inescapable societal issues driving the equity gap. Women still shoulder the greater burden when it comes to unpaid work and family care, which in turn leads to a greater proportion of women working part-time in lower-paid positions.
It is a fact that the gender pay gap is almost non-existent before the age of 40. After that we see the motherhood penalty creating an issue at both ends of the workplace. At the top, work is either not flexible enough or not designed in a way to enable flexibility, and as a result we lose a cohort of would-be female leaders. At the bottom, that larger distribution of women is concentrated in part-time, lower-paid roles.
Some of the more enlightened companies are doing their best to combat these issues. Especially since the pandemic, hybrid working patterns are enabling greater flexibility. Enhanced maternity leave is empowering women to look with greater confidence into motherhood. A new focus on paternity leave is allowing fathers to take on more, or even all, childcare beyond infancy. In some cases, companies are also investing in on-site childcare provision, for example Patagonia who have since reported a dual benefit: the increased retention of parents and a community spirit fostered by the children playing.
Gender Pay Reporting: Understanding the data
To move the needle further, work can be done on a case-by-case but also national level to address glaring anomalies in how gender pay data is recorded and processed. Most obviously, only companies with more than 250 employees are required to comply with gender pay reporting regulations, putting the distribution of pay for millions of private sector workers beyond question. Whilst Gender Pay reporting in itself is a positive requirement and exposes pay practice within businesses, the application of the regulations do not necessarily help in describing the true pay picture. Currently, data is collected on pay after and not before salary sacrifice, meaning a man and a woman with identical jobs and salaries might appear to be paid differently if one commits more to pension and the other to childcare vouchers. Company partners' salaries (male-dominated) are excluded from reporting, which can be misleading, and data around part-time and full-time workers' bonuses are not treated the same, further clouding the picture.
Equal Pay Audits
While the Pay Transparency Spectrum is broad, there is now a general acceptance that pay secrecy does allow gaps to flourish. With ESG also gaining traction across the board we are seeing a new appetite to open things up. By coupling this desire for greater transparency with the smart use of technology, we can help companies make a genuine shift.
We now receive more requests than ever for Equal Pay Audits. In the past, public sector organisations had a duty to provide these, but private sector businesses are now taking more interest in lifting the lid on how their policies, practices and allowances are being applied.
By working with clients to implement a Job Levelling or Job Evaluation System we can create a structured blueprint, allowing managers or HR to evaluate or slot roles into certain levels, demonstrating equal value in a robust, consistent way. Going beyond the headlines to understand why pay gaps exist, our Fair Pay Dashboard illustrates at a glance any differentials in pay across an organisation, looking in-depth at how pay awards are given and how progression happens.
This analysis allows HR professionals to gain valuable insight into their pay risks, either at a fixed point or over a period of time. We can track new recruits to compare the relative journeys of a man and a woman starting in the same role on the same day. Beyond gender, we can overlay a company’s ethnicity policy, age categories or pay scales to analyse current levels, project forecasts or create aspirational perspectives. Looking beyond simple pay, we can also assess the application of things like flexible working or paternity leave and see how they vary across organisations, if left unchecked.
Gender Parity Accelerators
Even allowing for these more sophisticated trends in data analysis, the World Economic Forum recently forecast that if things carry on at the current rate, the Gender Pay Gap will take over 150 years to close. It is a sobering assessment and leads to one key question: How can we expedite the narrowing of the gap? Every company can soul-search in terms of recruitment, gender distribution, succession planning, job design and policies around parental leave but how do we take giant leaps forward?
One exciting new term coined by the WEF is Gender Parity Accelerators: big policy decisions being made at a macro level in certain countries. Costa Rica, for example, has introduced a national care policy around pre-school children, to great effect. In Iceland, new policies on shared parental leave and accessible childcare have had a profound impact on gender equality nationwide.
Taking this concept forward, we need to encourage business owners to create their own Gender Parity Accelerators, geared to their business or industry. Inevitably it will involve brave, creative thinking around job redesign, recruitment and job sharing. It will need more explicit definitions of flexible working and more rigorous self-censoring and application of current policy.
This could also signal the dawn of a new era where we, as HR and business leaders, curb our lazy assumptions that policies are being followed through or making a difference. Collectively, we need to choose change. We need to lift the lid on our shortcomings and push impatiently for fundamental shifts in two key areas: on a societal level, new policies need to enable men and women to share more of the non-paid caring duties. And on a business level, leaders need to shape policies that enable greater flexibility in full-time roles, training and development to create and retain a pipeline of future female leaders.
For more information on how we can help you with your approach, please visit our Gender Pay Gap Reporting page, or contact us here.
