Gender Pay: trends and some golden rules! 

United Kingdom

The content of the second set of gender pay gap figures inevitably requires different considerations than the first year of reporting, especially if an organisation is acknowledging that their pay gap remains significant or  has not improved. In this Law-Now we review some of the trends we are seeing in the way employers are positioning their second gender pay gap reports. And if you’re looking for fresh ideas on this issue, then have a look at our short video on five golden rules on gender pay.

What trends are we seeing with year 2 reports?

A variety of explanations are being put forward by employers to explain why their gap has, or has not, moved over the course of the year. For those employers that have yet to report, it may be helpful to see some trends that we have picked up and the approach of other employers. 

Focussing on equality rather than the gender pay gap figure in isolation

Bear in mind that the gender pay gap figure should not be the sole measurement of equality in an organisation. Some organisations have said that family friendly measures such as encouraging flexible and part-time working have attracted more women than men, and this has affected their pay gap. In one organisation a number of female employees had taken salary sacrifice benefits, such as child care and additional annual leave, compared to male staff, and this had adversely affected their pay gap. Acknowledging that some measures designed to lower the gender pay gap in the long term, could increase the gap in the short term – such as hiring more young women -  has also been mentioned. 

Using the data to drive the desired gender pay gap outcome

One approach is to carry out a more detailed level of analysis than the regulations require to determine where the main source of the pay gap lies. Having carried out the additional analysis, one organisation uncovered that half of their gender pay gap resulted from the imbalance in the lower quartile and reported that they were therefore focussing on increasing the recruitment of men in that salary banding to improve the lower quartile gap. Another approach is to focus on “in-grade gaps” by assessing the gender pay impact of people at similar grade levels.

Setting targets and highlighting progress so far

While acknowledging that more work needs to be done, in one organisation the focus in their narrative was to explain that 39% of their senior leaders were female, with a target to increase this to 45% by 2020 and 50% by 2025. Similarly, another organisation explained that in the last 13 years their female senior manager figures had increased from 12% to 28.1% in addition to setting targets for the future.

Impact of following process and systems

One novel explanation put forward was to say that there had been a “loyalty penalty” where women were promoted internally, yet external male recruits were hired on a higher salary and the impact this had on the gender pay gap.

As you can see, what many organisations have tried to do is tell their story and explain what they have done and what they plan to do in the future to bring about change; it is not all about the numbers! If you would like more information on gender pay gap solutions or help with drafting your narrative please contact your usual CMS contact.