Concerns have emerged over the effectiveness of the legal requirement for firms to publish their gender pay gap data, with thought leaders in the world of work indicating that the still relatively new scheme has become a rote exercise for business leaders, rather than a launch-pad for action.
In early analysis of this year’s round of gender pay gap figures, [1] CIPD found that the headline median gap has slightly worsened, rising from 9.2% to 9.6%: a year-on-year change of 0.4%. Plus, the proportion of organisations paying women less than men rose from 77.10% to 77.79%. However, there was a slight increase in the average proportion of women in each wage quartile, with particular movement in the upper-middle and upper-pay quartiles, which typically have a greater proportion of men.
A similar analysis of the data from the BBC [2] noted that, based on median hourly pay, 3,000 companies (27% of the overall sample) paid their female employees more than 20% less than men. Just 1,425 firms (15% of the sample) paid women more than their male staff.
CIPD CEO Peter Cheese noted that some of the figures may have been skewed by firms bringing in more female staff at entry level to create a suitable talent pipeline. However, he said: “It’s disappointing that many employers are still not providing a narrative or action plan. Organisations that simply provide their numbers are failing to meet the increasing appetite and expectation for transparency amongst all stakeholders, including employees, investors, and regulators. Financial figures would never be given without any explanation for them, and gender pay gap reporting should be no different.
He added: “As we head into the third year of gender pay gap reporting we need to see more of how organisations are responding and the actions they are taking.”
Fawcett Society chief Sam Smethers struck a similar note, saying: “It's time for action plans, not excuses. Employers need to set out a five-year strategy for how they will close their gender pay gaps, monitoring progress and results. Government needs to require employers to publish action plans that we can hold them accountable to, with meaningful sanctions in place for those who do not comply.
“In some cases employers will have a wider gap because they have taken on new female junior staff to build their pipeline. But unless they can demonstrate that, it is more likely that they’ve failed to make changes.”
What should firms include in the sort of action plans that Cheese and Smethers are calling for?
Institute of Leadership & Management head of research, policy and standards Kate Cooper says: “It’s sometimes easier to call for action plans in a general sense than isolate or identify specific, individual actions that need to be taken. And that’s hard to do at a general level because every organisation, and every situational context within one, is different. If you have what is overall a very happy, engaged workforce comprised of people who don’t want to leave, then unless you decide to rapidly expand, how are you going to create the vacancies that will enable you channel these new and enlightened recruitment practices?
“We often see that giving members of staff high-profile projects enables them to establish distinctive personal brands, helping them to forge reputations as people who can be relied upon to deliver results. But if there aren’t a lot of projects around – which is often the case when organisations are in periods of consolidation, rather than eyeing potential for growth – then opportunities for using projects in that way become somewhat limited. So in a way, it’s not surprising that we’ve had little progress in a year.”
However, Cooper notes: “I do agree with Peter Cheese and Sam Smethers that we need rather more on this front than simply the publication of the figures. Rather than coming up with spurious excuses, the like of which I have been very critical of in the past [Ed’s note: check out this Institute podcast from last year featuring Kate’s withering take on companies’ ‘reasons’ for not appointing more female board members], each individual company should be devising its own set of bespoke actions, with a lot of meaningful narrative and context around them. That narrative should touch on points such as what they’re hoping to achieve and what sort of realistic targets they’ve set for achieving it.”
Cooper points out: “Again, that will vary between organisations and even entire sectors. For example, if you are in an industry where women are heavily underrepresented, then a five-year plan is unlikely to fix the problem. But I do think it’s helpful to have this conversation every year – and the embarrassment that widening pay gaps trigger among organisations should encourage leaders to take the issue seriously and do something about it.”
She adds: “If this means that we’re challenging our ways of thinking, properly evaluating the resources a job really needs, paying for the job rather than the person and offering flexible working because we know it has wide appeal – along with meaningful part-time work that is not considered less important than the full-time work – then that will all be immensely positive.”
For further insights on the points raised in this blog, check out the Institute’s resources on developing talent
Source refs: [1]