Is compulsory gender pay reporting really – as King’s College economics professor, Baroness Wolf, described – just “gesture politics” which “will do nothing whatsoever about the things that are really a problem for poorly paid women and which have nothing to do with widespread overt pay discrimination, for which there is no evidence at all any more anyway?”
Is the British Chambers of Commerce right that reporting a single male to female pay gap figure risked “taking a complex set of issues and reducing it to a few headline statistics?”
For me there has been a disappointing response to the government’s decision to activate section 78 of the Equality Act 2010. There has naturally been a lot of uncertainty and discussion on what might be involved, but there has also been a fair amount of negative comment that compulsory gender pay reporting cannot really do anything to address the UK’s very real gender pay gap of 19.1% (all employees) or 9.4% (full-time only).
While it’s certainly true that a number on its own won’t change anything, that viewpoint forgets that the first step in tackling a problem is admitting you have one and, more importantly, that you get what you measure.
No company I have worked with has deliberately discriminated between the genders and the unconscious assumption is that this is someone else’s problem. Yet every equal pay audit I have been involved with has found a gender pay gap of at least 10% (full-time) and often much more.
Whether you know it or not your company is almost certainly part of the nation’s gender pay gap problem; so what can HR do about it?
Make sure HR takes charge of gender pay reporting
So far a lot of employment law advisers have been talking about compulsory gender pay reporting. This makes a certain sense; it is a legal requirement that companies over 250 employees will have to meet or potentially suffer the consequences.
However, if gender pay reporting in your company becomes simply a matter of meeting a legal requirement to bury in your annual report or somewhere on the Corporate Social Responsibility page of your website then compulsory reporting will have failed and won’t change anything.
Instead, ensure that HR, and not the lawyers, takes the lead so that this is focused on examining the root causes of why there may be a pay gap in your organisation; not just how to tick a box on the governance checklist.
Be the ethical champion
After every major scandal, whether Enron or the BBC redundancy payments, there is a call for HR to be an ethical champion within business, acting as its conscience. On the subject of gender pay equality I think HR has so far failed to meet this challenge. Let’s not forget that the whole reason that the compulsory reporting was brought in was because only five companies had responded to the ‘Think, Act, Report’ initiative, voluntarily choosing to investigate and report on their gender pay gap. This is an issue that has largely been ducked by business.
HR can take advantage of this legislation, putting gender pay on every large company’s management team agenda to investigate, identify their pay gaps and potential causes and champion actions which will help close that gap in the long-term.
Be positive about what you can do
While there are a wide range of societal pressures which are undoubtedly contributing to the gender pay gap, consider what you can practically do. Recent stories have highlighted as many as 50,000 new mothers a year ‘forced out of work’, as they have been treated so poorly on returning from maternity leave they felt they had to leave altogether and more than half of working women within the UK believing that male-dominated leaders often hire and promote ‘in their own image’ and that this raises a barrier to their career progression.
Both of these are examples of where (hopefully) unconscious biases are preventing companies finding and retaining female talent within their organisations. Look at your own company’s policies and processes and ask yourself if they are fit to ensure that you attract, retain and develop the best talent you can find, regardless of gender.
Act now and without delay
The exact timing of the first compulsory reporting is still unknown. While this will be law by 26th March 2016, it is unclear if the reporting may be phased in with larger companies reporting first, if it will be need to be published immediately or with the next annual report or even if it will need to be published every year or every two or three years.
To wait to take action until you are forced to is to ignore the problem and waste the time you have now to start addressing any issues you uncover. While running a full detailed Equal Pay Audit can take a long time, simply calculating your overall gender pay gap can be done very quickly. Right now, in fact, we are seeing that the identification of headline gaps and creating subsequent action plans is a burgeoning area of client demand.
Start off with your ‘headline’ pay gaps for all employees – full-time only and part-time only – and use these as a starting point to drill down and understand if your company is contributing to the national pay gap or not. You don’t have to have all the answers when you look into this the first time, but it is possible that you will get the right questions to ask. If you use this time properly, your first compulsory report can highlight the initiatives you have launched and progress you have already made to close your gap.
Ultimately equal pay is not an issue for someone else to sort out, but something that we all need to play our part in addressing. Rather than a burden, compulsory gender pay reporting is an opportunity for business and HR to give focus to, and help solve, a societal problem so our children don’t have to pass an Equal Pay Act 2050 to finally put this to bed.
Adam Nuckley joined Innecto Reward Consulting in 2010 as a reward consultant and has extensive experience in compensation and benefits particularly around areas including pay benchmarking, pay structure creation, data modelling, analysis and design. He consults many of Innecto’s clients in areas such as the media, financial services, manufacturing, retail, charity and sporting sectors.