Gender pay gap reporting: what have we learned from Year One?

The deadline for firms with more than 250 employees to publish the average pay gap between male and female workers has now passed, and it’s been a year full of lessons. While some organisations struggled with the calculations, and many left reporting until the last day, what’s crucial is that we now have a benchmark from which employers can focus on improving progression and opportunities to achieve equality at all levels. As we take stock of this first year, what are some of the most important lessons that we can take forward into Year Two?

Interestingly, more employers have published the size of their gender pay gaps than anticipated, with a surge of reporting around the deadline itself. The Government Equalities Office originally estimated that the requirement to report gender pay variations would affect around 1,000 public sector employers and 8,000 private and voluntary sector organisations. But by the deadline, 10,043 organisations had announced their gender pay differences on the Government’s website. Of those, 241 have reported voluntarily as they employed fewer than 250 staff, while 1,659 public sector bodies have published as opposed to the estimate of 1,000.

It’s great to see organisations going above and beyond the minimum legal requirements and publishing voluntarily, which will show clients, suppliers, employees and potential candidates that the organisation is progressive and serious about improving equality in the labour market. However, the figures also confirm that there are more private and voluntary sector employers captured by this legislation than first thought. If this is true then the EHRC, the regulator responsible for overseeing compliance, could have a far greater workload than originally thought. Unless it is given more resource, this may impact on its ability to police pay reporting. At present, the EHRC is preparing to chase approximately 1,500 companies which haven't reported.

Another thing we’ve learned from social media is that there is confusion about whether the gender pay gap is real or just a ‘myth’. Though how the result of a mathematical calculation can result in something that doesn’t exist is something I have difficulty in understanding, I can at least comprehend the argument that the gap is a ‘myth’ in that it occurs due to individual choice. For instance, women who receive lower pay because they decide to take part-time jobs so that they can look after their children or elderly dependents.

However, most part-time jobs are in such sectors as retail, hospitality and caring, which tend to be low paying. There is less opportunity to work part-time in high paying sectors, such as finance, transport or legal. There is also a lack of promotion opportunities for those that want part-time work, as it becomes less available as you move up organisations. This has a significant impact on female career progression and takes the choice to advance away from many. Timewise has found that only around 10% of jobs are advertised as being able to be done flexibly.

Even where such opportunities do exist, it often involves a mother having to change professions within these industries, such as a female solicitor switching from a legal job in her law firm to one in the marketing department that offers more flexibility. For some, this is a genuine choice which they are happy to take. For others, however, it is something that is forced on them.

Similarly, choices of subjects and qualifications at school or university can have an impact on the gender pay gap. Many of these decisions can be influenced by societal expectations about what is seen as men’s and women’s work.

From a hiring perspective, even if we believe that our choices about recruitment or pay are free from bias, CIPD reports about behavioural science reveal that we are all prone to unconscious biases when it comes to people management, such as how we select candidates or reward workers.

Over the last 12 months, we’ve also learned that is some confusion between gender pay gap reporting and equal pay auditing. As the CIPD equal pay factsheet  says the gender pay gap is not the same as pay discrimination or equal pay. The gender pay gap is calculated by taking all employees in an organisation and comparing the mean and median pay between men and women.

Equal pay rules outlaw pay differences in men and women’s pay for same or similar work, unless they can be objectively justified, such as if the difference is due to a location payment. It’s possible for an employer that treats women fairly in pay terms to have a large gender pay gap, and for an organisation that treats its female workers unfairly to have a small gap. But it’s important that employers play a role in explaining to their existing and current employees about the difference between gender pay gaps and equal pay gaps.

We’ve also learned that the way that employers calculate and report on their gender pay gaps could be improved, but I’m sure that sometime in the near future there will be a review of what and who to include. Despite some clear teething problems, we shouldn’t downplay the impact that reporting has had on bringing transparency to the lack of gender parity not only in the UK, but around the world.

The 5th April 2018 marks the start of the second year of gender pay gap reporting, so what can we expect to happen over the next 12 months? Employees, customers, investors and the government will want to see signs of action from organisations and HR is well placed to help their employers deliver on these expectations.

As I’ve already mentioned, the causes of the gender pay gap are complex. By publishing our figures, we have an opportunity to check progress and decide whether our people management practices truly reflect our current and future business and employee needs. While there is value in challenging assumptions about women’s roles and jobs, it’s also worthwhile questioning attitudes to male jobs as well. For instance, while we should be supporting more women to become pilots we should also be seeding equality by encouraging more men to become cabin crew.

Work and jobs change, so it’s important that we continually review how work is organised and jobs designed. Rather than looking at how work and jobs can be made more flexible to meet the needs of parents and carers, we should assume that all work and all jobs can be done by anyone on a flexible basis, unless proved otherwise. We should also remember that flexibility is multi-dimensional covering where, but when and how as well. With less focus on how long people spend at their desks and more concern for performance and outcomes, we will open ourselves up to an even bigger talent pool with employees that are diverse, engaged and productive.

As well as reviewing what, how, when, why and where work is done we should question the assumptions we use to attach salaries to those jobs as well as who we think is suitable to fill those roles. Similarly, we should be prepared to continually review other aspects of how we manage and develop people. Because our biases can be unconscious we need to review our decisions to see if they have led, or may lead, to unintended consequences.

However, employers can only do so much to close the gap. As a society, we need to improve how boys and girls are helped to choose subjects to study at school and pick their careers. Government needs to do more to improve the availability of and reduce the cost of childcare and eldercare if we want to help individuals maximise their potential within the workplace.

Gender is one lens through which to view whether we are helping employees flourish and allow many more to access and reach their potential at work. We should now look to use other lenses, such as age and race, to get a better understanding of what barriers to progress exist and how they may be overcome.

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