In a world where accusations of ‘fake news’ abound, data can be a remarkably successful tool for shining a light on inequality. Because while it’s easy to disregard the opinion of a person you disagree with, it’s harder to contend with cold, hard, well-researched statistics.
HR professionals have become particularly conversant with this idea in recent years, since the advent of the gender pay gap reporting regime. And now the second round of mandatory reporting for organisations with more than 250 employees has passed, complaints of inequality and disappointment at a lack of progress are back in the headlines. Second time around, employers may find explanations are harder to come by.
Pushbacks over pay disparity are justifiable: while gender equality is inarguably a long, arduous struggle, it’s unconscionable at a societal level that women are still steered into junior roles, more likely to work part-time than their male counterparts, and still take on the bulk of caring responsibilities.
But gender pay reporting is not a perfect tool, and the data can often bury the nuance of a far broader – and more complex – diversity challenge.
The numbers, as they stand, are broadly unchanged and by some measures are worse. According to data filed by more than 10,000 organisations, the UK’s national median gender pay gap for full-time workers in public and private sector organisations is 9.6 per cent, compared to 9.2 per cent in the first 2017/18 reporting year, while eight in 10 organisations pay men more than women. The mean pay gap has seen an incremental change in the opposite direction, narrowing from 13.4 per cent to 13.1 per cent.
Anyone anticipating significant strides in closing the gap will most likely be disappointed. Sections of the media have been furious, and the figures have fuelled a broader debate about whether tinkering with pay gaps can ever significantly impact the broader equality agenda.
But according to the experts, the data should be taken with a pinch of salt, at least in the short term. “The numbers are what they are – this process should be about what you do in response,” says Charles Cotton, senior reward consultant at the CIPD. “Some of the reasons for gender pay gaps are down to recruitment, training, how you design jobs, work and tasks. Some go beyond the workplace, like caring responsibilities, even the education people receive. The important thing is to get behind why the figures are the way they are, and take the necessary steps to reduce them.”
If the first step in reducing a gap is understanding it, this appears to be a stumbling block for organisations. A recent CIPD survey of managers at more than 700 UK organisations eligible for gender pay reporting found almost four in 10 (37 per cent) said they did not know what their gender pay gap was. A YouGov study in September last year found only 35 per cent of men and 24 per cent of women understood the correct definition of the gender pay gap, with the majority considering gender pay and equal pay to be the same thing.
“A lot of organisations still don’t understand the root cause of their numbers,” Tom Hellier, senior client partner at Korn Ferry Hay Group, says. “Looking back on the gender pay reporting from last year, even the raw data on the government’s website shows a lot of organisations had provided their numbers incorrectly.”
The lack of understanding could be exacerbated by historical criticisms of pay reporting as a ‘blunt’ tool. Even without taking into account the fact that the 2018/19 reporting period relied on data gathered before any gender pay interventions could realistically have produced results, tiny changes to organisational structure can initiate dramatic consequences in the year-on-year data – particularly among smaller companies.
App-based bank Monzo, which shifted its gap from 47.6 per cent to 14.1 per cent over the past year, is a clear example. The reason for its especially dramatic year-on-year improvement was a concerted onboarding effort that resulted in an altered team structure, according to head of people Tara Mansfield. “Our team more than trebled; some women joined Monzo in senior positions and women have also been promoted internally,” she said in its gender pay report.
Information technology company Fujitsu, which narrowed its gap from 17.9 per cent to 16.4 per cent (slightly below the average for the tech sector), was taking the first steps in what diversity and inclusion lead Sarah Kaiser describes as a “determined move” to eradicate its pay gap in the coming years. “Over half our graduate entrants last year were women, which is partly causing our gap to narrow,” she says. “We’ve also been putting the work in place around female leadership, which should have a dramatic impact on the pay gap next year.”
The organisation’s four-pronged action plan includes recruiting from diverse talent pools, inclusive management strategies, and the creation of a mentorship programme called FutureMe to support women in the organisation with ambitions to move into leadership roles. “A lot of companies with a gender pay gap say they have it because of men in high-powered roles, but that’s not an excuse – that is the definition of a gender pay gap,” Kaiser says. “You have to deal with the structural causes. This is not a problem you can solve by throwing money at it.”
For other organisations, structural changes have caused gaps to move in the other direction. Cereal manufacturer Weetabix, which played an active role in the initial government consultations over gender pay reporting, saw its median pay gap almost double from 4.9 per cent to 8.7 per cent after several women in senior roles took career breaks to start families.
“I’m genuinely disappointed and a little frustrated our median gap has widened,” says the company’s HR director, Stuart Branch. “But without wanting to put an overly positive spin on it, I feel it’s a product of us pushing our family-friendly reward and people policies.”
As part of fostering an inclusive culture, the manufacturer has invested in enhanced maternity and parental leave policies over the past few years, as well as offering childcare vouchers and flexible working options, but this is not reflected in the data. “Something the government has not included in this process is the ability to include things like maternity pay as an element of calculating that pay gap, which is one of the opportunities for further enhancement,” Branch says.