UK businesses with more than 250 employees have begun to report their gender pay gap – slowly. As I write this, just 9 companies have put their analysis on the government’s website. That leaves a long way to go before the estimated 9000 businesses, representing about half of the UK workforce, fulfil the requirement to publish their first report by 4 April 2018.
However, what I’m wondering, rather than what is taking them so long, is what we will actually have accomplished when all of that reporting is completed, other than generating some, largely unhelpful, newspaper headlines..
On the face of it, presenting median and mean base and bonus levels for men and women – along with a quartile analysis of distribution – doesn’t seem likely to tell us more than we already know, which is that there are more men at more senior levels of organisations than women, so they earn more.
What’s going to be interesting is what else companies chose to do with the data they’ve had to collect, and how those that are truly committed to reducing the gender pay gap can make the exercise worthwhile.
It strikes me that there are two main levers for businesses looking to narrow their gender pay gap.
The first, which arguably shouldn’t exist given years of focus on equal value, is “are we paying the same money for doing the same job”. About 15 years ago, while working at a well-known reward consultancy, I did some analysis on that question for senior management roles and found there was still a gap of c.10%; this year Andrew Chamberlain, the Chief Economist at Glassdoor, found that the “same job” gap has closed to 5.5%. That’s still a gap, though…
The second lever, and the one with the most work to do, is a better understanding of the distribution and flow of people through your organisation. The government reporting makes a start, but the real value add is in lifting the lid to understand what will make a real change. Sometimes what’s needed are smaller changes in approach that have a broad impact.
As an example, Virgin Money was an early reporter and revealed a 36% gender pay gap. Looking more deeply, they did have a lower proportion of senior women, but they also had very few men in their customer service roles. Looking at how to make the customer service role more attractive to men actually has the potential to make a bigger impact on their headline figure than appointing a new female executive. This gives them a more inclusive narrative about improving their value proposition across the organisation.
So, your first port of call when considering your headline gender pay numbers – and how you present them (first to staff and then publicly)- is to make sure you address any equal pay issues within roles or grades. A well-designed grading structure, an analysis of internal relativities, and possibly a bit of benchmarking, will help you avoid falling at this first hurdle – and let you plan any remedial action you might need if individuals are adrift.
Once you’ve run your numbers, you will need to take a step back to understand what’s driving them. Are there groups with a strong gender bias? Can you change that profile? Or find roles at a similar level where you can attract the under-represented gender? For example, you may not entice more women into haulage roles, but can you attract them into skilled traffic and dispatch roles? When looking at this, remember that you can’t force people into roles that don’t interest them; it’s about removing barriers that stop interested people from trying.
Stepping back from gender, is there a broader approach to improve your employee value proposition that could also impact your gender pay outcomes? How about flexible working for all roles? If this is seen as the norm, and role-modelled by senior men, it removes the potential bias against women working flexibly – not to mention driving up your employee engagement. Another great option is using apprenticeships for older workers to help them gain more highly paid skills that may not have been accessible early in their career.
Spending some time digging beneath your headline figures, and identifying steps to address issues in distribution and flow in the organisation will help you build a powerful narrative around your first year gender pay reporting figures, as well as a plan to improve them going forward. This will help both in presenting the figures to current employees – demonstrating that you are clear about any issues as well as how to address them – and in future attraction and retention as the new initiatives make your business an even better place to work.
If you’d like a fresh set of eyes to help with the analysis, please do get in touch.