“As salaries rise, the presence of women falls…”
Did you know that today (5 October 2021) is the deadline for organisations (with a headcount of 250 or more) to submit their 2020/21 gender pay gap reports?
This deadline was pushed back 6 months due to Covid-19, during a time when arguably it was more important than ever for organisations to monitor this, due to the disproportionate impact it has had on women in the workplace.
The Government Equalities Office defines the gender pay gap as “the difference between the average (mean or median) earnings of men and women across a workforce.”
According to the Office for National Statistics, the gender pay gap was 15.5% in 2020, down from 17.4% in 2019. On the face of it, this is an improvement but due to omissions, faults in reporting, that this may not be the real truth. We have the additional complexity this year of furlough, where many employees will have been on reduced pay on the snapshot dates for calculation.
According to the Women in Work 2021 report from PWC, at the current rate of decline it will take 112 years to eradicate the gap...so perhaps our great great great (and some more) grandchildren may see an impact at work. Depressing, right? But this is an opportunity for workplace reformation...
So what can be done to close the gap?
Often organisations look to promote more women (a numbers game) or put in place specific programmes to fast track females (which research has shown has little impact, and can actually cause discontent amongst employees). Instead, we would recommend considering these five key areas...
1. Measure, analyse, communicate and implement action plans
Though obvious, the first step is to measure your gender pay gap within your organisation. An understanding of your numbers means that you have a hold on your data and can truly analyse it, giving you the opportunity to bring about equality. Organisations should put in place tactics to consistently and accurately measure this data, continuously evaluating key trends. This information needs to be communicated with your employees and action plans driven from this. In our experience employee input has always been invaluable - it’s a great way to encourage innovation and engagement from within… remember your people are your change.
Creating action plans is fantastic, but organisations need to ensure that there is accountability for following through on them, and to have reporting in place to measure their impact. It’s so important that your gender pay gap reporting is not just a tick box exercise. The action plans created are an opportunity for positive change and should be revisited and measured regularly. We would recommend that this is an ongoing agenda item at organisational Board meetings.
2. Pay transparency from the outset
Do you ask for a prospective employee’s current salary when interviewing for a role you are hiring? Through sophisticated job design and evaluation an organisation should know what the value of an individual’s contribution, and therefore salary, should be. In asking this question, you are undermining your commitment to diversity, equity and inclusion, as basing pay decisions on their history can further widen a pay gap they may have been historically privy to.
It is best to pay what the role requires and deserves. That way, pay inequality is eradicated from day one for your new recruits.
What about your existing employees? We like to keep quiet about ‘sensitive’ topics such as salaries in the UK culturally, but we think that a rise in the millennial worker (who will make up 75% of the global workforce by 2025), who value inclusivity, are likely to reject traditional norms and are more vocal on such topics, will change this.
Like the recruitment process, removing salary negotiations throughout your promotion process can also ensure a gender level playing field (men are generally more likely to negotiate higher salaries).
3. Ensure that flexible working is available to everyone
Covid-19 changed the way that we worked overnight, creating a new opportunity for previous naysayers to experience the benefits of working flexibly. Flexible working is no longer viewed as a solution which is exclusive to working mothers. It is for working fathers, for carers, for those who want to commit their time elsewhere, for those who want to pursue a side hustle or hobby; it is a way of working for working people, for anyone.
Have you heard of the female brain drain? If not, it’s worth a Google. The Women’s Equality Party have stated that “Women returners earn around a third less than male counterparts, taking between a 12% and 32% pay cut, causing a bottleneck effect - as salaries rise the presence of women falls.” The impact here is huge - less women in senior roles means that there is inequality in decisions being made within organisations, a limited number of role models for junior employees and an impact on the gender pay gap.
We believe that most roles can be carried out flexibly, and with clever job design and evaluation, alongside leadership and a culture that supports inclusivity and progression, now is the time to make this a reality within your organisation. Not only will it positively impact upon your gender pay gap, but boost engagement, productivity and profitability.
4. Mastermind, manage and maximise job sharing
Job sharing is an incredible way to maintain an upward career trajectory whilst working in a part time capacity individually.
Job sharing means achieving the aims of a full time role with complete and continuous client coverage and business continuity, whilst reducing the midweek or Friday lull. Implementing and embedding job sharing successfully within your organisation will provide you with productive, engaged and committed employees.
It also opens the door to an untapped talent pool of individuals who have been forced out of the workforce in a bid to secure work that allows them to work flexibly, for whatever reason - an issue which disproportionately impacts women.
It is a mechanism of disrupting the cycle of being overqualified and underpaid.
And this is where it can impact your gender pay gap - job sharing can be carried out successfully in most roles, in most sectors, and we have countless case studies to prove this. Importantly, we are seeing an increase in job sharing at a senior level, allowing more women to retain their senior roles post maternity leave and salary, impacting positively on the gender pay gap.
5. Remember your equal pay obligations
Unequal pay is not a question of deliberate malintent, but without a plan of action to resolve it, there is tacit facilitation of the ongoing issue.
Of the FTSE 100 in the UK, just 6 CEOs are female. Depressingly, there are more men named David running Britain’s biggest companies than there are women, and on average male CEOs earn 17% more than their female CEO counterparts.
Individuals should receive equal pay for equal work. The law states so. Always have that at the forefront of your mind when making any pay related decisions.
Research shows that organisations with more than 1in 3 women on executive committees are far more profitable than those with none. PWC’s Women in Work report estimated that increasing the number of women in work could result in £48bn per annum to the UK. We could go on...
A diverse workforce is a profitable one. It is an equitable one. But not only that; gender equality is of huge benefit to your employees and the economy. It makes commercial business sense.
What has been the most impactful action which has shifted your gender pay gap? Have you published your report? What were your findings? Let us know your thoughts in the comments below.
Curious to learn more about how to implement job sharing at your organisation? Contact us at firstname.lastname@example.org, or click on our Calendly link in the comments, to book a free 30-minute exploratory call.