Now that the first cycle of gender pay gap reports have been published, attention will inevitably shift to the content of the year 2 figures, and crucially whether the figure will have reduced.
Many organisations published their own action plans setting out their gender pay gap actions, ranging from unconscious bias training to reviewing promotional structures. In this Law-Now we identify our 5 top tips to reduce the gap in the short term. These ideas should be seen as complementary and not as substitutes to longer term solutions.
Tip 1 Do what you say you will
While this might sound rather obvious, ensure that steps you publicly committed to taking, or announced internally, do happen. We all know that good intentions can slip. Having one senior person who is the sponsor or lead and who is accountable should help ensure delivery. If your Year 2 GPG figure does not reduce, then you will still be able to refer to the amount of activity you have undertaken, and explain that the effects of this plan of action will take time to bear fruit.
Tip 2 Impact assess pay increases and bonus awards
Ensure that someone carries out a gender impact assessment or a similar type of exercise before your annual salary and bonus payments are confirmed. Ideally employers want to avoid paying an annual bonus in April as 1/12th of this is then included in the hourly rate figure. In effect this is a form of double-counting as bonus payments are also reported in the bonus pay gap. We know of one client who devised a tool for managers which showed them the impact of a pay increase on their GPG figure. While that might not be possible for all employees, thinking about the impact of individual increases on the overall average may challenge accepted practices and identify new, more objective approaches. While recent academic research discredits the myth of the “reticent female” where women are not confident in asking for a pay rise, the same report (Do Women Ask?) highlighted that men are 25% more likely to actually get the pay increase when they ask for it.
Tip 3 Review gender balance at all levels of the organisation
Most employers have explained that their pay gap is (at least partly) based on gender imbalance at different levels of the organisation, particularly the impact of relatively few women at senior level. However, because we are dealing with the law of averages here, employees must look at all levels in their organisation. Where you have disproportionate numbers of one gender, then taking active steps to recruit more of the other gender can have a significant impact on your figures. For example, we are aware of one organisation actively encouraging men to apply for roles in their female dominated retail environment to improve their gender balance, which of course will have a corresponding impact on their GPG figures.
Tip 4 Encourage flexible working amongst male staff
Now this might seem controversial, but for most organisations the prevalence of predominantly female part time workers, has not only an indirect impact on the pay gap but also has a significant impact on the bonus pay gap, where the figures are based on actual amounts received rather than being pro-rated. If this issue is addressed and promoted as part of a wider strategy to support employees with their work-life balance, then not only will the individual men (and indeed your organisation) benefit, this will have an impact on your pay gap figure.
Tip 5 Carry out a pay audit
If you have not already done so, consider carrying out some form of analysis of how you pay men and women for comparable work. This type of investigation can vary in size and scale from a full equal pay audit with external consultants to a lighter touch exercise involving a grade level analysis of pay based on gender. Keeping an open mind at the start of this exercise is essential. In our experience, no employer deliberately sets out to pay different rates of pay to men and women doing comparable work, yet through time, ring fencing, lateral hires and various other factors (which may include cultural issues) differences can arise. When we look at these differences through a legal lens, the question is whether these differences can be justified according to a material factor defence under the equal pay provisions, or whether you need to take corrective action.
While for many years equal pay was looked at as a public sector issue, we are certainly seeing an increased appetite for individuals to bring equal pay claims in the private sector. If you have carried out an audit it can not only identify and help you to address pay disparities, it can also assist you in the defence of an equal pay claim. Equally if you are unionised, the act of carrying out the audit in the first place may of itself reduce the risk of claims being brought.
If you would like assistance or advice on carrying out a pay audit or any of other suggestions in this Law-Now then please contact us.