Last week I shared a podium with Ruth Thomas from Curo Compensation to talk Equal Pay. There was lots of discussion in the room about the technicalities of Gender Pay Gap reporting (we’re still awaiting the final guidelines) but the focus soon turned to broader aspects.
The general consensus was that it’s not really about pay. After all we’ve had the Equal Pay Act for forty years now. It’s really about gender parity.
So why is parity important?
On a societal and macro-economic level, when women are empowered, society benefits, grows and thrives. According to a UN Foundation, women reinvest 90% of their income back into their families, while men reinvest only 30-40%.
Equalising women’s levels of productivity and employment to that of men’s could add almost £600 billion to the economy, which could clear a third of the UK’s national debt.
Greater diversity at an organisation level can improve performance:
- Talent is slipping away. According to the World Economic Forum in 97 countries more women than men are enrolling at university but in only 68 do they make up the majority of skilled workers
- Korn Ferry research has shown that women have better leadership skills associated with emotional intelligence
- Diversity improves decision making – it fosters innovation and creativity through a greater variety of problem solving approaches, perspectives and ideas
- Diversity strengthens customer orientation - Women and minority groups are key consumer decision makers. In the UK women make 80% of consumer purchases
- Diversity sends a positive message to your current staff and future talent that you don’t tolerate inequality
Gender parity also gives economic and financial opportunities:
- If the 2.2 million women who want to work started working, 10% could be added to the size of the UK economy by 2030
- Over 1.5 million women already in work would like to do more hours. If they worked just one extra hour each week, that would contribute 80 million more hours a year in productivity
It’s not about quotas for women it’s about the benefits of a more diverse workforce – time and again studies have shown the benefits of diversity.
- Credit Suisse has shown that companies with women directors have better a share price over 6 years.
- Where there are more than 3 women on the Board, company financial measures improve: Return on Sales improves by 84%, ROIC by 60% and Return on Equities by 46%
The room fully supported greater diversity. Organisations were looking to go beyond the legislation; analysing their gender pay gap at a company, functional, grade and tenure level etc. as a tool to deep dive into gender balance.
We shared insights of where we’ve seen company level headline numbers mask what’s going on beneath and how teasing out the good and not-so-good helps you create your action plan.
Your actions need to be both short and long term. There’s no point reacting to the data if the fundamentals of fair reward (strategy, structures, consistency and transparency) aren’t in place. You will always be playing catch up.
And whilst many action plans will be reward focused (reviewing policies, practices, metrics progression and bias) it’s really about knowing your gender balance. Knowing why you may not have gender parity by age, grade, role or tenure. Why roles aren’t attractive to talent or whether, when and where women opt out. And taking action.
There’s some great research from Gill Amos on how organisations can help and how women can help themselves. We’ve seen activity around flexible working, inclusive recruitment practices, mentoring, developing quality part time roles and links with colleges (particularly in STEM sectors).
Be aware that some of these actions will take time to take shape. If you are successfully recruiting a balanced workforce at entry level but not attracting or growing sufficient female talent in middle and senior tiers, your gender pay gap may get worse before it gets better.
So your narrative is important: tell your story inside as well as outside the organisation.
So is senior level buy-in to ensure changes are sustainable.
Lastly, it was acknowledged that the current focus is on gender but diversity means much more than that. Is it time to get the rest of your diversity ducks lined up?
At Verditer we help you deliver fair and equitable pay that employees trust. Contact us to discuss our Gender Pay Reporting Service if you're looking to understand and address your gender pay gap - we will happily send you a sample report with no obligation.
Photo by JD Hancock.