Why equality-related pay gap reporting matters

Why gender pay audits and the like are important instruments for change.

Inclusion, diversity and equality concept. Letters on wooden cubes over pink background.

 

Do the gender pay audits work or are they too blunt to deliver any meaningful information? The issue came up in connection with calls for ethnicity pay gap reporting at a Women and Equalities Committee session last week where the same question was put in relation to ethnicity.

That question leads on to others. If the information is meaningless, does it matter if the gender pay audits were suspended for 2020 or delayed in 2021?  It is certainly simplistic to just use the average gender pay gap out of context. While it may show that some sectors have a worse problem than others, it doesn’t measure like with like nor give you any idea about what a particular employer is doing – or not doing – to address it. Moreover, moves to address the gap may lead to a larger overall gap, for instance, hiring more women at lower levels can skew the overall figure. Just one move at the top – the loss of one woman – can make a big difference.

The issue is not the overall figure, but understanding why you have a gap and deciding what to do about it. That is why it is vital that the legislation be reformed to make it mandatory to publish an action plan that details what the gap shows and how an employer is going to address it. The UK led on gender pay audits once upon a time, but has since failed to keep up with what other progressive countries are doing. That is a missed opportunity.

Data collection is an important part of tackling inequality – after all, you can’t do anything about something you don’t know is there – and will become even more so. Employers need to be more data literate and HR teams increasingly need to hire for data analysis skills. In today’s world, data is power, but power needs to come with responsibility. Data on its own can be used for good or for ill. How we use it very much depends on what kind of vision we have for our society. We can drill down the data in many different ways, moreover. When we look at our annual survey results, for instance, we can filter not just for working pattern, but number of children, single parent status, region, etc. All of this delivers important, and actionable, information. Of course, larger companies have more resources when it comes to getting that nuanced data, but what happens at the larger employers filters down to smaller ones and vice versa. Smaller companies are often more nimble and agile and they can poach top talent from the larger employers because of that.

Measuring gender pay gaps or ethnicity pay gaps or other pay gaps may be a fairly blunt instrument at the moment, but that instrument can be honed and, if accompanied by analysis and action, is surely much better than the alternative – business as normal, a lack of equal opportunities and a failure to capitalise on all the talent a society has to offer.



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