Closing the gender pay gap: how to compile an action plan

By Jill Evans, Law Content Analyst at the CIPD.

The TUC is calling on government to make action plans a compulsory part of gender pay gap reporting. Its latest analysis of ONS statistics shows that, since 2011, the gender pay gap has fallen by an average of 0.4% a year, so that at this rate, it will take until 2067 to close the gap. As the gender pay gap for all employees is 17.3%, the TUC calculates that, on average, women effectively have to wait 63 days each year before they start to get paid. In the finance and insurance sector, where the pay gap is 33.7%, there’s a 123-day gap between women and men starting to receive pay for the year. 

With just three weeks to go (30 March 2020) before public sector organisations with 250-plus employees need to report their gender pay gap data, and four weeks left (4 April 2020) before the deadline for private and voluntary sector organisations, it’s imperative that organisations turn their attention to compiling an action plan to accompany their calculations. If you haven’t published your data yet, follow our six simple steps to gender pay gap reporting 

Politicians, campaigners like the TUC, and the public, are increasingly calling for action plans to become a part of gender pay gap reporting, so they may become a legal requirement in future. Even if that’s still some way off, if you report a gap, your employees, customers and stakeholders will want to know what you are doing to close it. For them, how you act on the reported gender pay gap data is just as important as collecting and publishing the figures themselves.  

Start with evidence 

Investigating your gender pay gap calculations can provide valuable insights into the actions you need to take to close the gap. You should look at your pay range (the difference between the highest and lowest paid)If you have a high mean gender pay and bonus gap and a large pay range, review your payment system to ensure it doesn’t disadvantage women.  

If your median and mean pay gap figures are widely different, this may be because you have a group of very low or high earners. If either group is mostly men or mostly women – say, for example, your high earners are mostly men and your low earners are mostly women – take action to break down occupational segregation. Try to develop more women so they become eligible for the top jobs, and actively target more men to fill your lower paid jobs. Check your recruitment procedures aren’t reinforcing gender stereotyping in certain roles.  

If your mean gender bonus gap is high and more men than women receive bonusesmonitor your performance appraisal system and measurmanagerial discretion over awarding bonuses. 

Monitor recruitment and progression  

Your gender pay gap could be due to differences between men and women in terms of performance ratings, skills, qualifications and experience. Finding out the reasons for any differences could be crucial to closing your gapMap the information against your gender pay gap calculations and look at why and where women are failing to get higher-earning jobs. Are cultural norms in your organisation or sector putting women – or men – off?  

If you’re heavily reliant on word-of-mouth recruitment, use more open recruitment channels to avoid reinforcing gender stereotypes. For example, posting adverts for engineering roles on more generic recruitment sites could help widen your talent pool.  

Check how well your flexible working policies are working for both men and women by asking departing staff in exit interviews or through in-work feedback. 

  • For ‘18 tips for better recruitment practice’, see our research report A head for hiring: the behavioural science of recruitment and selection 

 Monitor flexible working 

By making family leave and flexible working arrangements available to all, you can help avoid the career stalling and occupational downgrading that many women face due to part-time working. Rather than encouraging more women into more part-time roles, your focus should be on enabling families to redistribute caring responsibilities.   

You should look for imbalances between men and women working flexibly, and the level of work at which people work flexiblyYou should also check the proportions of men and women taking shared parental leave, and the proportion of women who stay at your organisation after more than one instance of maternity leave.  

Ask your employees what would encourage more men to take time out to care for their families or enable more women to progress in your organisation alongside raising a family 

  • Read the CIPD’s flexible working resources for more tips  

 Monitor reward 

Inequalities in your reward system not only affect your gender pay gap figures, they put you at high risk of equal pay claims. To avoid this, check for differences in starting salaries for men and women on recruitment and on promotion. Look at how you define and reward experience; differences that were once justifiable may not stand up to scrutiny over time. Check your bonus system reflects performance, not managerial preferences.    

  • Read the CIPD’s resources on reward strategy for more tips  

 Amend your practices and procedures  

There’s no silver bullet to closing the gender pay gap; it will take collective and persistent action. Important first steps for your action plan include: 

  • Adding gender pay gap analysis to the tools managers use when setting starting salaries, discussing progression opportunities and carrying out annual pay reviews. 
  • Using gender neutral language in job adverts, adding pay bands to job advertisements to avoid importing pay inequality from previous employment, and emphasising your commitment to flexible working in those ads. 
  • Incorporating anonymised CVs and panel interviewing into recruitment procedures to reduce occupational segregation.  
  • Using external testing when recruiting for senior roles and appointing a talent acquisition champion to ensure hiring managers see a full range of job candidates. 
  • Exploring web-based solutions to create more flexible working and learning and development opportunities 

 Make sure that: 

  • Your action plan addresses the root causes of your pay gap 
  • You look at and try to break down occupational segregation  
  • You do all that you can to minimise the motherhood and eldercare penalty 
  • Your reward system is free from gender bias 
  • Closing the gender pay gap becomes everyone’s responsibility. 

For more advice and guidance, follow our countdown to the gender pay gap reporting deadline onTwitter, LinkedInandFacebook or download our full Gender Pay Gap Reporting Guide 

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