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Gender Pay Gap

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How can employers continue to close the gender pay gap?

In March last year, the government decided that, because of the unprecedented pressures COVID-19 created for businesses; mandatory gender pay gap reporting was to be suspended.

This decision was met with severe disdain, with many worried about the disproportionate effect the pandemic was about to have on women as the primary caregivers for home-schooled children and sick relatives. Women also make up most of the harder hit sectors such as retail and hospitality. Allowing employers to take their eye off the Diversity and Inclusion ball, and potentially worsen the gender pay gap, was a dangerous path to take.

However, despite the pause on reporting, many companies still published their figures for 2019/20. These companies clearly demonstrated their commitment to reducing gender bias and, consequently, they stand  head and shoulders above those who didn’t offer their hand.

From the 5,800+ companies that submitted their gender pay gap last year, it was reported by the ONS that the gender pay gap had closed significantly compared to 2019, with all employees seeing a pay gap of 15.5 per cent compared to 17.4 per cent the previous year. Of course, the statistics must be taken with a pinch of salt due to the much lower number of submissions nationally.

So, as the mandatory requirement of the gender pay gap reporting returns this year, and as Diversity and Inclusion becomes an even more important topic across the UK, how can employers help support the closing of the gender pay gap in 2021?

Transparent pay structures

A study published in 2015 gave resounding evidence that those companies who were open and honest with their employees about pay structures were more likely to help reduce gender and racial inequality in the workplace. So why do so many companies still treat it as a taboo subject?

Employers who choose to hide information around pay are far more likely to instil a sense of paranoia amongst a team. While employees don’t have the automatic right to know their colleagues pay, if there is evidence of unfair pay, then those employees are entitled to get hold of the information and begin proceedings against you for discrimination.

If employees are aware that they are being paid fairly, then this is only going to boost individual and team morale, establish you as an employer of choice and perhaps even motivate employees to continue climbing the ladder.

Implement skills-based hiring

A regular issue in the hiring process is unconscious gender bias. One way to eradicate this is to move away from the traditional interview process and instead, look to apply skill-based performance hiring.

The fulfilment of any role is to ensure that the hands-on tasks can be done efficiently and to a high standard, and the gender of a candidate is irrelevant. The questions asked in a traditional interview do not necessarily give candidates the opportunity to showcase their abilities in a practical way.

Most importantly, skills-based tasks are standardised and therefore help to eliminate any bias within the interview process.

Create an equal parental leave policy

Gender equality doesn’t only apply to women, but to men also, and one area of huge disparity across the UK is the right to equal parental leave. Paternity leave entitles fathers to only two weeks leave where they receive £146.68, with most agency and contract workers ineligible for this benefit. Women receive 39 weeks, including six weeks enhanced pay.

While it may seem like a ‘good deal’ for mothers, the shocking statistics prove otherwise. In 2015 it was found that 54,000 mothers lose their job every year, and the gender pay gap is at its worse when women reach those child-rearing years.

This draconian rule must come to an end if we are to reach real equality. Fathers should be allowed to spend time caregiving and bonding with a child as much as a mother has the right to hold down a stable and secure job for the period she chooses to be away.

UK companies should take a leaf out of Finland's or Iceland’s books. These are two countries with the fairest parental leave policies and it’s no surprise that they also have the globe’s narrowest gender pay gaps.

Further representation at senior level

Currently, only 7 per cent of FTSE 100 CEOs are women and while there’s been an increase of representation with FTSE 350 non-executive roles, they are ‘conspicuously absent’ from more senior roles.

Research from the CMI shows that, despite representing half of the working population, women are 40 per cent less likely to be promoted into senior roles than their male counterparts. Not only does this further widen the gender pay gap, but it makes women at entry-level much less likely to want to join a company who lack any diversity, creating an unnecessary and vicious cycle.

Employers need to be working hard to ensure there are offers for part-time senior and board-level roles, in order to give working mothers and caregivers the ability to sit at the top. Companies must also create clear mentoring paths to equip women, as well as men, with the correct skills and knowledge to excel into senior positions if they so desire.

Publish your data

There may be times in the future where the gender pay gap reporting is once again made voluntary instead of mandatory. However, if this was to arise, it is important that companies continue to publish their gender pay gap data regardless of official legislation. Not only will this place them in a much more favourable position with stakeholders, but they will also be instrumental in forcing the hands of less willing companies to follow suit.

2021 needs to be the year where all companies get behind the crucial need to further close the gender pay gap and commit to a fairer, more equal working society.