Many employers don’t know how to address their gender pay gap. But we provide some pointers.
With so much focus on gender equality in our media, one could be forgiven for assuming that this country is streaks ahead of most others in addressing the issue. But PwC’s 2019 Women in Work Index tells a very different story.
Although the UK has moved up a position in the index this year, it still ranks a lowly 13th out of 33 OECD nations for female economic empowerment, with Iceland taking top spot, Sweden second and New Zealand third. These, and other countries, have introduced a variety of measures to reduce the problem.
For example, in Iceland, men get at least three months’ paternity leave, and 90% of them take it, whilst Norway introduced rules in 2006 which state there should be a minimum representation of approximately 40% of both sexes on company boards.
New Zealand has established a working group to help employers recognise and address how conscious and unconscious bias affects women’s recruitment and pay advancement, whilst Slovenia has introduced family-friendly enterprise certification for employers.
In Denmark, companies which don’t take steps to close big pay gaps between genders even risk being fined.
PwC reports that progress in Britain is being stifled by a “stubbornly persistent” gender pay gap, and other research does little to contradict this.
According to a recent YouGov survey for Young Women’s Trust, around one in 10 employers say that women in their organisation are paid less than men at the same level, only one in three organisations has actually tried to reduce its gender pay gap over the past year, and 10% of HR decision makers say their organisation doesn’t know how to and doesn’t take the matter seriously enough.
This is despite the introduction in 2017 of mandatory gender pay gap reporting, which requires companies with 250 or more employees to publish and report specific figures about the difference between the average earnings of men and women.
Young Women’s Trust is calling on employers to help combat the problem by saying what they pay in job adverts to aid transparency – a proposal that 55% of senior HR professionals think would help bring about gender equality in the workplace.
It also says that employers should avoid asking candidates their current salary – which 47% of bosses say they still do – on the grounds that it disadvantages those already paid less than they are worth.
Other steps for employers recommended by the Government Equalities Office include ensuring that more than one woman is included on any shortlist for recruitment and promotions, and using structured job interviews that ask exactly the same questions to all candidates in a predetermined order and format – and grading the responses using pre-specified standardised criteria.
It also advises encouraging salary negotiations by showing salary ranges – because women are less likely to negotiate their pay – together with appointing diversity managers, encouraging the uptake of shared parental leave, and recruiting those wishing to return to work after an extended career break for caring or other reasons.
Further methods used by Zurich Insurance, which successfully reduced its gender pay gap to a 22.8% mean average for fixed hourly pay in 2018 from 27.3% in 2017, include running an 800 member-strong gender-focused employee group, promoting a flexible working programme and operating intern, apprentice and graduate entry routes – for which 50% of its 2018 intake was female.
Zurich also uses screening software to ensure recruitment adverts appeal to a wide range of applicants and it ensures that all job interviews are conducted by at least two managers – ideally with a mix of gender and ethnicity. The insurer’s UK executive team is even assessed on diversity and inclusion as part of their performance management objectives.
Obviously not all businesses have the resources needed to follow this type of example but we firmly believe that it should not only be employers large enough to have to do gender pay gap reporting that should be concerned with gender equality.
In addition to benefiting society as a whole, gender equality undoubtedly improves employee satisfaction and strengthens businesses. It therefore makes commercial sense.
Further information on tools that can be used to close the gender pay gap can be found from the Government Equal Opportunities Office website:
Content correct at time of writing and is intended for general information only and should not be construed as advice