Gender pay gap (GPG) reporting has shone a much-needed spotlight on the pay discrepancies and gender inequalities that have long been overlooked in the workplace. However, despite two years of reporting, progress has been slow and this is partly down to to the limitations of the legislation itself. With a renewed focus on tackling gender pay inequality brought by the current political climate, now is a good time to reflect on how current legislation could be improved and the simple steps businesses can take to improve their own performance.
The current GPG legislation falls short in a number of areas. First, firms are not held to account if they fail to report their figures in full or provide incorrect numbers. There are no penalties in place to enforce the reporting process, risking it becoming purely a tick-box exercise. GPG reporting is further hindered by the absence of an independent body to scrutinise the numbers businesses submit. These calculations are complex and without some form of audit system, the numbers could be subject to manipulation, undermining the purpose of the legislation.
Transparency around the action employers are taking should also be considered. One positive step forward would be the introduction of mandatory action plans, in which organisations explain publicly how they plan to their address their gap. This measure, alongside a more accountable and audited system, should increase the pressure on firms to report accurately and commit to proactive steps to reduce their GPG.
Another element of the legislation that has come under scrutiny is the reporting threshold. Currently, only companies with more than 250 employees are required to report their GPG, but there are calls to expand this to include smaller businesses. After all, if we want to drive gender equality, it seems sensible that a wider spectrum of organisations is held to account. Smaller firms are usually more adaptable to change, so this approach could actually pave the way for more equitable pay standards in the future.
Five steps to reduce your GPG
Improving gender pay inequality in the workplace may appear to be a daunting task, but there are some proactive steps businesses can take to start closing their GPG.
Make senior leadership accountable
Reducing your GPG should be considered as important as any other commercial goal. Set performance objectives for the leadership team that make them accountable for shrinking the gap. This sends a strong message to all staff that this is a key priority for the business.
Influence and educate management
The leaders of the business must use their influence to educate management about each team’s contribution to the pay gap. Make sure managers of each business unit understand the gender balance and pay gap within their own team and how best to tackle it.
Get granular with data
To yield better results, firms should split their GPG data and analyse it across the employee lifecycle. This will give a better picture of disparities at each level and department. Look, for instance, at the attrition and promotion rates for women across the business to identify where improvement efforts should be directed.
Assess your culture
Consider the culture of your workplace and assess if it is conducive to both men and women being successful. One approach could be to ensure there is support for working parents; for example, by offering shared parental leave. Such initiatives will allow both men and women to progress equally within the organisation.
Publish an action plan
Demonstrate your commitment to gender equality by publishing an action plan of exactly how the business will address its GPG. This will differ from firm to firm as each will have different reasons for their gap. For example, those with few women at senior levels might consider expanding their talent pool and recruiting laterally from other sectors; those with retention issues might commit to introducing flexible working to support the progression of female employees.
Ultimately, if the GPG is going to be significantly reduced in our lifetime action is needed from both legislators and businesses. While the GPG will not close overnight, with collective commitment we can narrow the gap year on year and reduce the inequalities that still exist in the modern workplace.
Claire England is director of diversity and inclusion at JLL