Guest Blog by Peter Meyler, Head of Workplace Consultancy at Barnett Waddingham
The introduction of mandatory gender pay reporting was an attempt to bring the issue of visibility and understanding of differences in pay into the open. Peter Meyler, Head of Workplace Consultancy at Barnett Waddingham, outlines the questions and answers raised by gender pay reporting and looks at ways HR professionals can take the lead in responding.
With mandatory reporting just concentrating on macro level information, very little has been revealed for large, complex and diverse businesses. The requirement on HRs to produce and publish averages, medians and quartiles were clearly defined, however they are affected by so many other indicators.
Indicators that will show real value to employers include:-
- The number and proportion of women versus men employed at different job levels and job roles
- Differences in the hourly pay rate by gender at comparable job levels, roles and locations
- Evidence and assurance that performance is being properly assessed, reviewed and reflected
- Evidence that pay increases are being applied fairly against performance and potential
- Comparable levels of starting pay for the same job regardless of gender
- The number of management roles at all levels that can be worked part-time or as part of a job share
- The number of women choosing to return to work after having a child and returning at the same level or responsibility and pay as their male colleagues
- The level and type of support and development provided to staff returning from career breaks
Organisations need to identify where any gap is narrowest and widest, what the reasons are for this and the action required to reduce the gap. Most importantly, HR professionals will need to consider why they want to reduce the gap and ensure any actions help to achieve this. This makes it very difficult to benchmark a gender pay gap with other organisations on a comparable basis and whether there is a problem or not.
What do employees think is going on?
Our recent Generation WHY? survey, which looks at the UK working population’s attitudes to financial wellbeing, reinforces the importance of businesses acknowledging the issues and how they intend to respond. Less than a third of all respondents said there is a genuine openness and transparency about pay within their organisation. In addition, only 23% of employees believe a gender pay gap exists in their organisation overall, compared to 17% who believe one exists with the people they directly work with.
Younger people, aged 30 and under, appear to have the strongest belief that a gender pay gap exists within the organisation they work for. Employees in the social care and charity sectors have the highest awareness and transparency around pay, 46% and 43% respectively, compared to just 18% for insurance and pensions and 21% for environment and agriculture. The actual organisational gender pay gap is perceived to be greatest among survey respondents in insurance & pensions, 49%, and media, 45%.
Inevitably, this type of reporting will extend the discussion beyond just being about pay and into discussions about equality of opportunities and treatment and mandated reporting requirements could have gone further. The reality is that HR professionals shouldn’t have to wait for the Government to mandate action which forces them to respond. They should already provide governance and assurance that their employment policies are “fit for purpose” and being applied fairly and effectively.
Gender is just one demographic dimension of the workforce. What is next?
The biggest demographic change in the UK going forward will be in ethnicity. By the next General Election in 2022, the White British demographic, aged 16-64, will for the first time make up less than three quarters of the UK population, with ethnic minorities making up a significantly increased 16.3%. Attracting ethnic minority talent will become a key battleground in the UK . It would not be a surprising to see an increased push on employment reporting for this group, increasing their management representation in UK business and pay reporting by ethnicity.
Understanding your gender pay gap is a good starting point for the HR industry. However, using HR metrics and other employment data you have at your disposal is key to really understanding the employment journey. It could also improve your ability to attract, develop and retain top talent, and the health and the strength of your employment model and value proposition. Stand out from your competitors.