Last reviewed 24 April 2019
A statutory requirement for large private and public sector organisations to calculate and publicly report their gender pay gap statistics has been in place since 2017. The publication of the second set of data relating to 2018/19 has revealed that the median gender pay gap for full-time employees has increased from 9.2% to 9.6%, with almost 8 out of 10 employers continuing to have a pay gap in favour of men.
The increase highlights that more proactive action is needed in this area to close the gender pay gap; the Government, equality bodies and campaigners are all urging employers to tackle their gender pay gaps and improve the figures.
Analysing the gap
Before action can be taken to close any identified gender pay gap, organisations will be best placed to analyse exactly what is driving and contributing towards such a gap in their business, sector and profession. This has been one of the major criticisms of the reporting regulations because they fail to place a specific requirement on those who have to report statistics to carry out any further analysis. The difficulty with this failure is that effective and proactive plans to close the gender pay gap are unlikely to be introduced where the contributing factors are not understood.
Once an internal gender pay gap has been calculated, organisations can carry out an internal review to assess whether they have any barriers within their workplace. This may reveal areas of concern such as: female workers do not progress higher than a certain level or grade; more workers of a particular gender leave the organisation once they reach a certain role; those who carry out assessment centres are using short-listing matrices that are weighed more beneficially for one gender; or more females leave the particular profession due to caring or childcare responsibilities.
Creating an action plan
It is recognised that there are steps which can be taken by organisations to close the gender pay gap, whether focusing solely on an internal strategy or taking action on a higher level, with various advisory bodies releasing practical guidance for employers in the wake of gender pay gap reporting. The Government Equalities Office has released a guidance document titled Reducing the gender pay gap and improving gender equality in organisations: Evidence-based actions for employers which outlines actions that have been proven to work, and those where more evidence is needed to encourage these as widespread practices. It is thought that such guidance will help employers to create action plans that are more effective at closing the gender pay gap.
Such guidance contains general advice, however, which may or may not be suitable to introduce in certain organisations or may not have the required effect. Therefore, although organisations are being encouraged to review this guidance, they are also advised to steer away from generic statements or plans of action. Instead, a clear plan that is tailored to their particular business which contains specific measurable commitments will be key to closing the gender pay gap. The use of targets expressed in the form of percentages or numbers are seen as preferable because the success of these can be reviewed easily, although an organisation may be placed in a detrimental position if it was unable to explain why specified targets were missed, if that is the case.
It is also well known that outside factors can cause a higher gender pay gap in certain industries than others;, for example, the lower numbers of female students studying STEM (science, technology, engineering and mathematics) subjects through higher and lower education is a factor that can’t be controlled by employers. However, they can introduce an attractive apprenticeship or training to help increase the number of females being trained in these areas in order to improve their employee pool.
The suggested actions for employers cover a wide range of employment areas, from recruitment through to pay to family leave. We take a look at some of these steps below:
Recruitment and interviewing
Using structured interviews ensures all applicants are measured on an equal basis, although there may be certain sectors where an unstructured interview is more suitable, such as creative roles. When using structured interviews, ensure candidates are asked the same questions to determine their suitability for the role as this allows their responses to be graded against the same criteria. Doing so prevents any issues with preferential treatment or unconscious bias against applicants of a particular gender.
The use of skill-based assessments or practical tasks can also lead to a selection process that focuses on the best candidate for the role, regardless of their gender. The performance of the individuals on the hypothetical tasks required by the job role can be measured against agreed scoring criteria that are applied uniformly across all candidates.
It is well recognised that a key benefit of the gender pay gap reporting regime is that pay transparency has increased. Furthering transparency on internal issues relating to pay, promotion and rewards can help encourage the closure of any identified pay gaps.
It is commonly thought that females are less likely than males to negotiate salaries or, where a female applicant is at an interview, questioning about previous salaries can continue bias or discriminatory behaviour where previous pay decisions have been affected by the individual’s sex. Increasing transparency on pay frameworks or bands can help women to negotiate salary or make suggestions based on the practical reality of that role, rather than making suggestions which have unconsciously taken their gender into account.
The same can be said for other internal processes, for example, promotion. In firms with old-fashioned outlooks, promotion and succession of employees may still be something that is discussed and agreed over a “lad’s lunch” or on the golf course. This fails to create an equal playing field for every employee, regardless of their gender, and can lead to an unsuitable employee being promoted. Where promotion opportunities and the criteria for selection are widely known, this will encourage more applications from suitable employees of any gender; in turn, helping to promote more female employees.
Although a gender pay gap may now be greater understood in the business, those who are responsible for management and leadership may not be best placed to understand and monitor the success of the business at embracing diversity.
Instead, organisations can introduce diversity managers or task forces who are assigned responsibility for monitoring and increasing diversity. The use of a specific person shows the company’s support and makes management more accountable for diversity going forwards because their decisions can be scrutinised or an explanation can be required by this individual.
The diversity manager can also be given responsibility for improving the culture and internal stance on diversity, through the implementation of new strategies, policies, awareness events and steering greater understanding.
A number of promising actions are outlined within the guidance to help employers close their gender pay gap, including the following.
Greater workplace flexibility for all members of staff, including new starters and senior leaders. Promoting flexible working among male employees will help all employees structure their work life around personal commitments and dispel the image that this is a female benefit only.
Encourage sharing of childcare responsibilities by promoting take up of Shared Parental Leave through increasing awareness, providing guidance and enhancing pay to the same level as enhanced maternity pay.
Recruit returners (those who have taken an extended career break due to caring or other responsibilities) by amending the recruitment process and offering support on their return to work.
Encourage mentoring, sponsorship and networking within the business to provide role models, advice and encouragement to further careers within the business.