Written by Nicola Gater | 19th May 2023
Despite efforts to address the gender pay gap in recent years, it remains a persistent issue in 2023. The introduction of gender pay gap reporting has been a positive step towards raising awareness of inequality in the workplace, but there is still a long way to go to actually close the gap.
There is also ongoing Government consultation about introducing mandatory ethnicity pay gap reporting, so it’s a good time for employers to become familiar with the factors that affect the pay gap between any groups, and it is not just about paying everyone the same rate for the same job.
What influences the pay gap?
While equal pay legislation has obliged employers to ensure that men and women in the same role receive the same rate of pay, the gender pay gap is influenced by more than just this.
It is the difference between average hourly earnings of all men and women in the organisation as a proportion of men’s average hourly earnings, regardless of role. So if the higher paid leaders of the organisation tend to be one gender, while the lower paid manual or admin (for example) tasks are carried out by another, the gender pay gap will be wider.
Four out of five companies in the UK continue to pay their male employees more overall than their female colleagues, according to April 2023 research by The Guardian. In more than half of companies and public bodies, the pay gap is at least 10%, and only one in 10 companies have no gap at all. This disparity is particularly concerning given that women are proportionately over burdened by the rising cost of living and don’t get access to higher pay levels.
There is no quick solution to closing the gap, and it will need to be addressed across society, at both industry and organisation level. In this blog, we offer thoughts on what employers can do to support the push towards pay equity in the workplace.
While this blog does focus on the gender pay gap, similar ideas can be applied to any group of employees under-represented in a workplace.
Look at your own pay gap and pay review strategies
Currently only organisations with 250 employees are required to report their gender pay gap, but it can be a useful exercise for smaller organisations as well. This provides insight that might not have been noticed before and gives a metric for comparison over time so you can chart the success of any measures you take to close it.
Also look at your pay review strategies. Do you regularly benchmark your pay rates for all roles at all levels against market rates? Are your managers who are making decisions about pay confident and capable of making those decisions fairly and without any conscious or unconscious bias towards one group of staff or another?
Do your lowest paid staff receive the same proportional annual pay award as the leaders of the organisation, to avoid the gap getting wider? Do you offer pay awards across the board, or only to those who ask?
Research suggests that men are much more likely to ask for a pay rise during performance reviews than women, and if you only give to those who ask, your gender pay gap may widen.
Equality and Diversity throughout your organisation
Collect and analyse data about your workforce. Do you happen to recruit, or lose, more of one gender than another? If your gender split isn’t equal, then this could affect your gender pay gap. Take an honest review of how attractive your workplace is to either gender. Do you have policies, working practices and processes that support both genders, which mean they want to come and work for you, and stay working for you throughout their career?
Do your career progression processes result in equal numbers of men and women reaching leadership (and higher paying) roles? One area many employers are now focusing on is leadership development for women if they are underrepresented in their workplace. Research shows that organisations with gender diversity at senior levels make a better financial return than those who do not. By exploring the traditional barriers women have faced in reaching leadership roles, organisations can eliminate those difficulties and support women to achieve higher paying roles, reducing the pay gap.
Another reason women typically drop out of the workforce is linked to caring responsibilities, which often fall to women. Employers who normalise, celebrate and offer part time working and other flexible working opportunities, especially at leadership levels, tend to have lower pay gaps, as women are able to combine commitments outside of work with their work hours and responsibilities.
Don’t overlook part time staff or staff who work from home when considering promotion and development opportunities. Think creatively about how you can support childcare or adult care for your teams, so you benefit from their talent and contribution, and they have meaningful work whilst meeting their personal commitments.
And don’t forget to support men with their caring responsibilities. By supporting initiatives such as longer paid paternity leave, paid shared parental leave, and part time working for all, more men are supported to take on caring responsibilities so that the burden doesn’t fall disproportionally to women and they can spend more of their time on their careers.
Industry wide progress
There are a number of industries, sectors and roles which are typically made up of one gender or another. A construction company trying to close their pay gap may find it difficult if there are not enough women coming into the industry in the first place.
We ourselves at Reality HR find there are a lack of male candidates applying for HR roles. While it won’t be a quick win, employers can still play a part in supporting change. Getting involved at school and college levels, to educate and raise awareness of its industry and careers for people of all backgrounds and from all minority groups; offering apprenticeships and internships to provide work experience and a route into the industry; sponsoring university studies and professional qualifications for underrepresented groups, will all start to make a gradual difference to the gender pay gap in the industry over time.
While gender pay gap reporting is a legal requirement for many organisations, improving diversity and equality of opportunity at all levels of the organisation brings other benefits. Bringing together people who have different experiences, different ways of thinking, different expertise and talent, means organisations can be more creative in their strategic planning and execution, and as a result, have advantage over their competitors.
If you would like support with calculating your gender pay gap, conducting pay reviews, and developing strategies to tackle inequality, please get in touch with our team at info@realityhr.co.uk