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With the second deadline approaching, we provide an update on the gender pay gap and what progress has been made in the first year. We also examine how the initiative has impacted the wider make-up of the workforce.

Billed as being the biggest change in the legislative framework to buoy the progress of women, since the Equal Pay Act in 1970 made it illegal to pay different sexes different wages for the same job, employers approach the second deadline requiring them to publish their gender pay gap data.

The reporting deadline requiring all companies employing more than 250 people to disclose information about their gender pay gap is 30 March for public companies and 4 April for private companies.

Gender Pay Gap figures: an update

Whilst national figures suggest progress is being made incrementally, at a sector level the picture varies widely. Figures overall indicate that 50 per cent of employers have narrowed the gender pay gap, whereas 39 per cent have widened the gap since last year.

Asset management has many decades of bias to overcome according to companies required to publish their data, with initial results indicating a widening from 32.6 per cent to 33.1 per cent. The focus for the industry is getting more women into leadership roles to redress the balance. Whilst there is still time to go, construction is a sector, which is also traditionally male-dominated, with the median gender pay gap at 25 per cent last year.

High profile companies such as HSBC have already confirmed that their mean hourly pay gap between women and men has increased from 59 per cent to 61 per cent. Virgin Atlantic similarly experienced an increase of 28.4 per cent to 31 per cent. With 57 per cent of respondents to our UK Reward Management Survey conducting additional analysis to identify the reasons behind their pay gaps, we turn to what is in your control when it comes to acting upon the figures.

Check-list: how you can prepare for the second reporting round

1

Ensure the reports meet the legislative requirements

To demonstrate the importance that you are attaching as an organisation to addressing gender pay, ensure you meet the requirements of the legislation. Personnel Today reported that three in 10 of the reports published contained errors. Getting the basics right can signal that an organisation is really paying attention to the objectives that the requirements seek to attain.

2

Consider the narrative to explain the figures

Especially important in sectors where the figures may have worsened with efforts to address the gender balance. Proactive initiatives might mean that a company is redressing the balance with more recruitment of women at entry-level. Deloitte have stressed that their gender pay gap is a result of the lack of women in leadership, which they are taking steps towards addressing. They also flagged that some of the steps being taken to address the gender balance may have a short-term adverse impact on the statutory reported figure. Being absolutely clear and proactive in relation to the drivers behind their figures promotes trust in the organisation and its future.

3

Define the next steps being taken to close the gap

Wider pressures that are being addressed which are societal in nature, including greater part time roles for mothers, lower paid roles and lack of confidence when it comes to long-term financial planning are also within this remit for companies to show they are making a material impact. Financial wellbeing is a hot topic in HR and can be used as a tool to tackle the gender pay gap. It is one way in which companies can be seen to promote wider equality within the workplace, equipping women with the confidence to map out and transform the opportunities available.

How has the initiative impacted the wider workforce?

The legal requirement for companies to publish this insight into pay practices is part of a wider movement to promote transparency and fairness within all companies when it comes to their pay practices and approach to diversity.

Other initiatives such as the CEO pay ratio and the ethnicity pay gap reporting are a part of the wider push for equality. 2018 was a strong year in terms of diverse representation at leadership level, with The Telegraph and more recently, The Financial Times appointing dedicated Heads of Diversity within their organisations.

We are also increasingly discussing the importance of staff being reflective of the local area’s demographic make-up in order for the labour pool to most effectively understand and serve local areas. This is especially important in relation to sectors such as Housing Associations. Organisations with this social mission and focus on local communities are increasingly seeking to ensure that they draw resources from diverse local areas, seeking people with local understanding and insight.

More than a tick box exercise, diversity can enable employers to tap into broader talent pools. Diversity itself is a factor in recruitment, attracting talented individuals who are looking for these figures in order to find companies with inclusive cultures.

Future-proofing your business

Increasingly job seekers are holding prospective employers to account. Indeed, diversity and inclusion initiatives are being asked for as part of pitches and tenders. Diversity being used to attract and retain more internationally and culturally diverse voices goes beyond surface-level engagement and creates a cultural shift in authentically implementing inclusiveness within business. A diverse and accepting environment can support retention by offering security and ensuring all voices are heard, whilst signaling an impetus on innovation, by widening the skill set available and future-proofing organisations.

Develop equitable strategies to promote diversity and equality in your workplace by calling us today.


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