Highlighting failure is key to progress on pay gap

DELIVERING slow, incremental change that may take a generation to deliver is not an easy sell in this digital age of instant gratification. Yet that is the reality when it comes to closing the gender pay gap.

The pace of progress on this issue will once again come under scrutiny as we enter the home straits in the third round of the annual gender pay gap reporting regime. By April 4 all employers with more than 250 staff must publish their gender pay gap information.

When initially introduced in 2017, qualifying employers were naturally anxious about publishing their figures.

Given the complexity of the reporting process, most spent a great deal of time sorting out their calculations. Once the figures were published, concerns turned to how employers fared relative to their competitors.

A year later, the focus turned to progress made from the previous year and, for many, that wasn’t a lot. The BBC reported in March 2019 that 4 out of 10 employers had not improved their gaps.

While this disappointing news was greeted with apparent astonishment by some quarters of the media, it wasn’t a huge surprise.

This is not an area where it is easy for employers to make quick gains. Much is not due to how employers pay people but rather the gender make up of their workforce (which may itself go right back to more fundamental problems such as a lack of females working in their area) and the seniority of the female employees in their organisation.

While this annual reporting undoubtedly shines a spotlight on pay, progression and gender balance, it needs to be seen as just one part of the equality jigsaw.

In some cases, measures which are designed to improve equality can adversely impact on the gender pay gap.

For example, offering more flexible working and part-time hours can in some cases exacerbate the issue; likewise bringing in more women in maledominated industries at graduate or apprentice level may increase the pay gap in the short term but improve gender balance in the longer term. We do well to remember, the numbers rarely tell the full story.

And let’s also remember that gender pay gap reporting figures are not about whether employers remunerate male and female employees equally; that is an entirely different concept.

Gender pay gap reporting looks at averages across a workforce and does not require like-for-like comparisons.

It looks at the average hourly rate of all staff. It does not limit comparisons to similar roles or similar working hours. So a 40 per cent gender pay gap does not mean an employer pays a male employee doing the same job as a female employee 40% more.

The process does, however, identify patterns. These could include uncovering a disproportionately high portion of male higher earners in your organisation or a disproportionately low number of female employees receiving a bonus.

This information can be hugely illuminating. By measuring across an organisation we see the big picture which can be hard to spot at a micro level.

And that is why gender pay gap reporting, while not perfect, is vital.

My advice to employers preparing their year-three report is to tell the story that lies behind any gender pay gap.

Highlight the positives but don’t back away from the areas where you’ve failed to achieve the progress you hoped for.

Be open about lessons learned and adjust your strategy.

Above all, focus your energy not in making your figures for year three look better, but rather on implementing robust strategies which show a long-term commitment to gender equality.