Gender pay audits: reputational risk or opportunity?

While many employers have still to report their gender pay gap, a panel event this week heard that they should already be preparing for next year because that could prove a bigger reputational risk.

Career Progression for Women

 

Organisations with over 250 employees have to report their first annual gender pay gaps by April. If they don’t they could risk a fine. Speakers at the event organised by employee benefits company My Family Care said that reputational damage was likely to be a greater risk than any financial penalty. However, that risk could be more of a challenge in year two of the legislation as people will be able to measure if any progress has been made.

The event, which was repeated during the day due to high demand and which was linked to an earlier webinar which had hundreds of people on it, covered different aspects of the legislation. One speaker was Ann Francke from the Chartered Management Institute who said most employers would find they had a “glass pyramid” of earnings with the gender pay gap widening as women moved further up an organisation. The CMI’s calculations showed the average gap increasing from 4% at entry level to 23% at senior management level. There was also a massive 83% gender bonus gap. Francke said CMI research showed few employees had confidence in how their employers were tackling the gender pay gap with organisational culture seen as a big barrier to female progression. “They see a lot of rhetoric but very little progress generally,” she said. She added that line manager attitudes were key to that progress as was making gender diversity a whole business issue rather than an HR initiative. It was important to measure progress, to promote positive case studies and flexible working, to sponsor women and to tackle bias, she said.

Ed Bowyer, Employment Partner at Hogan Lovells, spoke about the intricacies of the gender pay legislation – including questions about what constitutes pay, for instance, does it involve overtime, and whether an organisation which has multiple acquisitions publishes each company’s results or the average results across the group.

He said it was important to distinguish between equal pay – the same pay for the same job or a job of equal value – and gender pay which is about average pay across an organisation. People were often very confused about the difference.

Bowyer said just 12% of employers had reported their gender pay gap so far. A very small number had a negative gap, such as Unilever which has a lot of men in manufacturing and a lot of women in more senior positions. Sixty one per cent had a gap in the 0.1% to 30% range. He added that the reputational risk of a gender pay gap was not always predictable – the BBC had a relatively small gap, but had come in for a lot of criticism due to the association with equal pay issues.

Naomi Goodman, Associate Director, Change & Employee Engagement at reputation management consultancy Lansons, said a lot of companies were passing the blame for their figures onto wider societal issues. She advised that the best way to deal with the legislation was to see it as an opportunity to differentiate company brand and provide a narrative of what was being done to tackle the gender pay gap, such as setting clear targets, partnering with schools or tackling unconscious bias. Communication of that narrative was vital and the internal audience was as important as the external one, she added. “If you do not provide a narrative, it is a huge opportunity missed,” echoed Jennifer Liston-Smith from My Family Care who chaired the event and also spoke about the impact of caring responsibilities on the gender pay gap – including gender stereotypes around both part-time men and working mums.

Lara Warburton, UK Diversity and Inclusion Manager at Rolls-Royce Plc, said the company reported an 8.1% median gap in November. It had created a steering group on gender pay including Reward and Diversity and Inclusion experts as well as internal and external communications people and had done a dry run. Rolls Royce’s experience had showed it was important to tackle misunderstanding about equal and gender pay head on, to provide a narrative and to have conversations with other organisations in the same sector who faced similar issues in order to influence government policy. Several speakers mentioned this need for collaboration across organisations to tackle the cultural issues at the heart of the gender pay gap.

Yesterday Barclays became the latest employer to publish its figures. They shows female employees earn up to 43.5% less than men. For its international business including large-scale UK and US operations, the bank reported a 48% gender pay gap, and this rose to 79% when bonuses were factored in. Barclays claimed the difference reflected the higher proportion of women in junior roles rather than any breach of pay equality rules and said it had a series of programmes to promote gender equality. Nicky Morgan, chair of the Treasury select committee, called the findings “shocking” and said Barclays may be called upon to give evidence to the committee in its inquiry into women in finance.



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