How to improve your gender pay gap

This time last year saw a flurry of activity as employers with over 250 workers had less than two months left to publish their first gender pay gap report. A year on, and whilst employers are preparing for the second report, the data published to date suggests a ‘mixed picture’ (1).

Personnel Today’s analysis in early January indicated that ‘while there are some isolated instances where the gap has grown significantly, the broad trend is very slightly downwards’ (1).

Whilst the marginal downturn maybe considered a PR success, Senior Consultant at Curo Compensation, Ruth Thomas, reminds us that “the government itself has said this is a five-year thing. It will take that time to get it working properly and see measures working so they have an impact on the numbers” (1).

But despite this being a bit of a slow burner, there are questions to ask and actions to take that can help you to begin to improve your gender pay gap. Review your previous year’s report and consider the following from the Government Equalities Office:

Do people get ‘stuck’ at certain levels in your organisation?

Under gender pay gap reporting, ‘the quartile breakdowns show the proportion of women and men at different pay levels. This approach allows different organisations to be compared. However, it does not take into account your particular organisational structure’ (2).

Actions:

  • Analyse the gender balance against your own structure, across job roles and departments (2) – what does this mean for you?
  • Set SMART objectives for your organisation and include these in your accompanying narrative to your next report – these should be specific and supported by rigorous methods to measure success to ensure you keep on track

Is there a gender imbalance in your promotions?

In order ‘to avoid gender imbalances higher up in your organisation, men and women need to apply for promotion in proportions that match the composition of men and women at grades below. For example, in a particular grade you might have 60% women and 40% men. In that case, the pool of candidates who apply for promotion from that grade to a more senior grade should also be 60% women and 40% men’ (2).

Actions:

  • Understand the proportion of men and women promoted, versus the composition of your organisation and identify the source of any imbalances (2)
  • Reflect on current processes – are any steps particularly imbalanced? How can you make the process more inclusive and transparent?
  • Use skills based assessments or interviews to put together a more inclusive promotion short list (3)

Are men or women more likely to be recruited into a lower paid role?

Your gender pay gap will be impacted if either ‘one gender enters your organisation at more junior levels than the other, or if they are less likely to be hired when they apply to join your organisation at higher levels’ (2).

Actions:

  • Be transparent about salary scales and conduct structured conversations in pay review discussions
  • Work with employees to identify actions they can take towards achieving a higher level role
  • Consider mentoring and sponsorship initiatives to develop employees (3)

Are attrition rates different for men and women?

Differing exit rates for men and women, particularly at more senior levels, could contribute to a greater gender pay gap (2).

Actions:

  • Look at the percentage of men and women leaving your organisation each year – what is the difference in the proportions? (2)
  • If completed thoroughly, review exit interview data to understand the reasons behind your attrition rates – are there different trends for men and women? (2)

Do aspects of pay, such as starting salaries and bonuses, differ for men and women?

One of the gender pay gap reporting requirements is the ‘proportion of men and women receiving bonuses. Under the Equality Act 2010, employers must also ensure they are providing equal compensation for equal work’ (2).

Actions:

  • Examine whether there are differences in aspects of pay for men and women completing comparable work (e.g. differences in pay for overtime, unsocial hours or bonuses) (2).
  • On average women are less likely to negotiate pay than men (2). If the gender pay gap is more favourable for men in your organisation, consider how pay review processes can be made more transparent to encourage women to be open about their salary expectations and negotiate a pay rise (3).
  • In your narrative explain big year on year differences – for example you might have paid a fixed amount as a bonus last year and this year it’s a percentage based bonus that will impact your bonus pay gap, or your senior team may have sold shares under an LTIP this year when they didn’t the previous year, so again this will skew the figures

On average, do men and women receive different performance scores?

Performance scores can indicate whether men and women are performing differently or are being treated differently (2).

Actions:

  • Look at the difference in scores, breaking them down and comparing across roles, grades and departments – what are the trends?
  • Encourage managers to monitor whether staff are given equal opportunities, resources and support (2)
  • If self-assessments are part of the process, ensure managers don’t have access to these until they have scored an employee to avoid gender bias (2)

How are your supporting part-time employees to progress?

On average, more women take up part-time roles to take on caring responsibilities. By supporting their development this increases the likelihood of their progression, allows them to participate more effectively in your workforce and could reduce your gender pay gap.

Actions:

  • Consider mentoring and sponsorship initiatives to develop employees (3)
  • Advertise roles as ‘happy to talk about flexible working’ (more here)
  • Help managers to understand how roles can be done flexibly or part-time – even at higher levels (2)

Are male and female employees both supported to take on caring responsibilities?

Taking on caring responsibilities should be an option for both men and women.

Actions:

  • Review the uptake of your Shared Parental Leave, flexible working, paternity leave, adoption leave etc (2).
  • If uptake is lower for a certain gender, consider what initiatives you can introduce to encourage the uptake of shared parental leave and flexible working (2).
  • Ensure your narrative reflects the fact that you have more women depressing their salaries through childcare sacrifices if this has impacted your figures

Sources

(1) https://www.personneltoday.com/hr/gender-pay-gap-reporting-2019-are-employers-improving/

(2) Gender Pay Gap Guidance Book

(3) Reducing the Gender Pay Gap