Publicising pay gaps alongside a Evidence shows companies with smaller
pay gaps are more profitable. Companies in the top 25 per cent for executive team gender diversity are 21 per cent more likely to experience above-average profitability than companies in the bottom quartile. Inequalities also weigh on economic growth and national well-being. Presaging Ms Mordaunt’s announcement
about the new consultation, the Fawcett Society in April called on employers to set out a five-year strategy for how they will close their gender pay gaps, monitor progress and results. The campaigning body is also pushing policymakers to require employers to publish action plans so they can be held accountable, including “meaningful sanctions” 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,” said Ms Smethers. “But unless they can demonstrate that, it is more likely that they’ve failed to make changes.”
IS LEGISLATION ALONE ENOUGH TO MOVE THE DIAL? However, the outcomes favoured by the GEO and bodies like the Fawcett Society in the current consultation – default flexible working and a tighter approach to gender pay gap reporting – could meet with opposition, despite their positive intent. Two years in, gender pay gap
reporting continues to attract criticism from employers. A fifth (21 per cent) of respondents to an MHR Analytics Twitter poll reported that their company struggled to file the mandatory report this year before the 4 April 2019 deadline. A further 38 per cent are still also unclear about their organisation’s gender pay gap reporting. These insights underline wider concerns
around current reporting arrangements. Laura Timms, product strategy manager at MHR Analytics, is among those warning of the danger gender pay gap reporting will fail as a tool for progress and positive
change, “This gender pay gap reporting legislation can be a significant drain on time and resources, particularly when added to all the other compliance obligations for HR, payroll and finance teams.” Another practical concern is that data
doesn’t provide enough meaningful insight for women to challenge unequal pay or companies to act on the information pay reporting yields. “Narrowing this gap to meet government targets will require proper data analysis,” said Ms Timms. “Employers will need to assess the complex underlying factors behind their pay gaps and make evidence-based plans to address them.” Without this traction, the lack of
know-how and the resourcing challenges organisations report, it’s easy to see why gender pay gap reporting on its own isn’t regarded as an effective or long-term solution to resolving ingrained norms like maternity and paternity leave that play into the gender pay gap.
WHAT CAN ORGANISATIONS DO TO PREPARE FOR MORE MEANINGFUL REPORTING? The Fawcett Society is among those calling on the government to get tough and require employers to publish action plans against which they can be held accountable and with “meaningful sanctions” for those who do not comply. With the possibility of ethnicity pay gap
reporting on the horizon – consultation on which closed earlier this year and the government is currently considering the evidence – and the wider amendments proposed around parental leave and flexible working in the current consultation, there is a real need for practical information around how to bridge the gap. For the moment at least, the government
is only suggesting companies filing their gender pay gaps add a supporting narrative; a document that can help readers understand why the gap exists and plans to address it.
supportive narrative and strategies to tackle the causes are critical to changing the narrative around reporting and something policymakers recognise in the advice it gives. The Government Equalities Office (GEO) says, “By publishing a plan with targets and clear actions, you will be sending a strong signal about your commitment to gender equality in the workplace.” The GEO, in partnership with its
Behavioural Insights Team (BIT), has already published evidence-based, best practice guidance on the action employers can include in their plans to reduce the gender pay gap. The newly launched Empowerment Roadmap should also support this by helping employers and employees understand what the challenges are and how they can be addressed.
GETTING WITH THE PROGRAMME Within this, mobility is well placed to ensure plans, goals and pay is monitored as part of an organisation’s wider commitment. This could include collecting data on the uptake of certain package elements, its values and around making sure packages are comparable, transparent and appropriate. It also means working closely with HR
and talent teams to ensure “that when you look for staff to be sent on global mobility assignments you don’t always pick the same people to go forward,” author, government adviser and CIPD Fellow Teresa Boughey told delegates at Relocate’s Festival of Global People this year. “It is about broadening your scope
and ensuring those opportunities aren’t narrowed because of someone’s race, gender or personal situation. I think it is absolutely vital not to make assumptions that people don’t want to be included.” With this summer’s announcements
and reviews, it looks like employers can expect more – not less – focus on inclusion and diversity, gender and now possibly race pay gaps, with the Ethnicity Pay Reporting consultation due to report after the end of the consultation period in January 2020. This important issue is not going to go away until we all take action.
Keep up-to-date with latest developments across employee benefits and financial support by visiting
relocateglobal.com
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34 | RELOCATE | AUTUMN 2019
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