The Government recently reported that the UK gender pay gap is at its lowest ever level at 18 percent. Alongside this, Justine Greening, Minister for Women and Equalities, cited that “there are more women in work than ever before, more women-led businesses than ever before and there are now women on every board in the FTSE100”. Article by Jane Galvin. COO and Partner, Barnett Waddingham.
Whilst this is a positive step in the right direction, new legislation regarding the reporting on gender pay suggests that more needs to be done. Effective from April 2017, companies with more than 250 employees will be required to report on the difference in average pay and bonuses (both mean and median) between men and women, as well as the proportion of men and women employed in each quartile across the workforce. Companies will be required to look at the difference in average pay between men and women as a whole, no matter what their role. However, is this enough to understand what it means for HR professionals and how data can be used to benefit business? Here are five ways an in-depth analysis of gender variances in your workforce can make a difference.
1: Go further than simply calculating averages and reporting, and focus on where the gender pay issues really are and what they mean – This will help you to understand why there is a gender pay gap in your organisation. Collating the data needed for the new gender pay gap reporting requirements gives us a prime opportunity to really delve in and investigate where exactly issues are apparent. It is then possible to focus attention and resources on understanding why and what we might want to do about them. For example, further investigation may see gender pay gap issues in a certain age bracket, certain job grade, a certain department or a certain office. Once you have identified where those key contributors are, it is possible to form a more appropriate plan of action or at the very least, better understand where and why there is a justifiable difference.
2: Benchmark across your industry – Knowledge of how you as a company compare against the industry and the UK as a whole can be a real benefit. To help companies identify how likely they are to have a gender pay gap, the Office of National Statistics have developed an interactive tool which breaks down gender pay gap data by profession. Businesses also have the ability to see how their sector compares to others. What we can’t yet see is how specific companies compare – this will be an important question when competing for female talent.
3: Make sure you are developing the right talent – Gender does matter and not because we should have a set quota of females or all be paid the same, but because not being paid the same, may be a sign of a much more important issue. It is only by really understanding the data that we can see whether we are (probably unconsciously) preventing the development of talent that undoubtedly exists in all of us to be our best. This may result in ambition being stifled in female and expectations lowered. Everyone needs role models that they can relate to and aspire to be like them. Women being under-represented in senior roles is one of the key concerns that is likely to become clear in gender pay reporting and be used as the reason for their being a gap. However, this position is commonly seen as a symptom of conscious or unconscious stereotypical attitudes about gender roles forming part of hiring, development and promotion decisions, and so justifies further analysis. Gender bias in any of these areas can result in a less balanced leadership team that is not able to use the whole cornucopia of skills that mankind has to offer. This ultimately hinders a company as a whole.
4: If you don’t have a gender pay gap, don’t spend time and resource on it – Arguably the new requirement on its own is only useful if we use it as a trigger to challenge whether bias really exists and whether this is causing issues for the business. If as a company you are in a position where the data doesn’t show a bias, it is important to focus on how data can help you create strategic policies that retain and recruit the right talent for your business.
Use the data to better understand your workforce – Companies should adopt an analysis ethos that goes further than just looking at gender pay, but also gives them a platform to delve into looking at who their employees are. Using both payroll data as well as sources of “big data” to better understand what your employees’ likely objectives, priorities and challenges are, will ensure that recruitment and benefit packages truly add value and help to attract and retain employees. Such data may also help you to understand the drivers of sickness and engagement such that action can be taken to get the best out of employees. The need for us to consider the pay gap by gender as a result of the new reporting requirements, may open a can of worms as businesses have to explain their position, but on the positive side, it opens up a need to really understand the workforce and whether we are getting the best out of them. This is the real can of opportunity.
