Legal

Four strategies for tackling the gender pay gap

17 Jan 2020 By Ian Dawson

Employers must commit to flexible working, produce narrative reports, make reward transparent and encourage salary negotiations, says Ian Dawson

Several women working at the BBC are preparing to take the broadcaster to employment tribunals over equal pay, following the recent equal pay case win by Samira Ahmed

Ahmed claimed £700,000 for lost earnings after discovering that she was paid around 600% less than her colleague, Jeremy Vine. Inevitably, her success will lead to an influx of equal pay cases being brought to the employment tribunals by other aggrieved female employees.

Currently, the average pay gap between full-time male and female workers is around 13% and studies show the average woman will earn around £260,000 less than their male equivalent throughout their careers. It is therefore essential that businesses monitor diversity in the workplace. 

Senior staff have the greatest influence over promotions and pay rises, so businesses should begin by considering the male-to-female ratio in senior management positions. Having a clear and robust equal opportunities policy is also a good start. However, it is important employers do not simply pay lip service to their policies but take positive steps to address the gender pay gap. 

Despite being a legal requirement since the introduction of the Equal Pay Act in 1970, discrimination in the workplace remains prevalent. Men are still paid more than women for doing work rated as of equal value. 

Since April 2017, companies with more than 250 employees are legally required to report their gender pay gap figures by the end of the financial year. Although not required by law, smaller businesses should also report this as a matter of course if they want to attract and retain quality staff.

Businesses need to do more than simply comply with the statutory minimum. Employers should invest time to analyse their gender pay gap figures and address the root cause for any disparities.

At the current rate of progress, the gap won’t be closed for at least another 60 years, which according to the Fawcett Society is ‘dismally slow’. The strategies businesses can implement to address the gender pay gap include:

Committing to flexible working

Allowing employees to work flexibly to fit around family arrangements is simple, and it is also a positive step to help reduce the gap. It is not uncommon for women to work reduced hours to allow them to manage family commitments, which unavoidably reduces their income. Flexible working would allow women to commit to full-time work without jeopardising important family time. Both the House of Commons and the Women and Equalities Committee have acknowledged flexible working for all ‘lies at the heart of addressing the gender pay gap’. As a result, companies should seek to implement flexible working practices, by having a flexible working policy (and associated application process). 

Producing a narrative report

In addition to the mandatory gender pay gap report required by law, businesses should consider publishing an accompanying narrative report which offers a detailed analysis of employee salaries, including a breakdown of the roles, hours and promotion statistics for each sex. In preparing a report of this kind, businesses can identify their shortcomings and provide a time-bound and target-driven action plan to close any identifiable gap. Being proactive and acknowledging a gap exists (if applicable) should demonstrate a commitment to equality. The report may even highlight legitimate economic and social factors for the gap. But a company simply will not know this until it has made a bona fide attempt to get to the root of the gap. 

Making promotions and pay rises transparent

It is essential businesses have a transparent process for promotions, pay rises and reward and ensure all employees have equal opportunities to progress. Adhering to structured and strictly skill-based interviews for recruitment and promotions will reduce unconscious gender bias. The Fawcett Society also encourages openness about salary, even though this is currently seen as taboo. Campaigners are calling for a change to the law allowing women to request salary details of male comparators if they suspect pay discrimination. While employees do not have the automatic right to know what someone else earns, they do have the right to know how salary increase calculations are made. So it is essential employers have a clear criteria in place and keep accurate records of deciding factors when decisions are made. 

Encouraging salary negotiations

Studies suggest men and women approach salary negotiations differently, which has been cited as a potential reason for the gender pay gap. Women are reportedly much less likely to negotiate their salary than men, leaving them on lower salaries. To rectify this, employers should seek to encourage all employees to negotiate their salary during reviews and advertise internal posts with a salary range. This will empower all colleagues to challenge the salary on offer and provide them with a realistic expectation of the salary available for a certain role. 

Ian Dawson is head of employment at Shulmans

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