An overwhelming majority of British businesses say they are taking concrete action to close their gender pay gaps, according to an influential new survey – but by focusing their efforts to address diversity on entry level recruitment, many may find their next round of reporting contains a nasty surprise.
A December 2018 poll of 250 firms employing 1 million people by the Confederation of British Industry (CBI) found 93 per cent were actively tackling their gender pay gap, up 31 percentage points on the same point a year earlier.
Sixty per cent of respondents said diversity helped attract and retain staff, and around half felt it brought new skills into the workforce. The CBI said this demonstrated a “sincere” will to report, understand and close gender pay gaps.
But 24 per cent said they were focusing their efforts on entry level recruitment, which could exacerbate pay gaps in the short term and risked failing to deal with structural and cultural issues that prevent women progressing at work, according to experts. The second round of gender pay reporting is due in April 2019.
“For the most part, employers are focusing on improving progression opportunities and on workplace diversity, which are positive steps. But there’s scope to go further, particularly on improving the gender balance in senior roles,” said Tony Wilson, director of the Institute for Employment Studies.
“One of the challenges for employers is that in some cases taking action on gender diversity could serve to widen pay gaps – for example, making full-time work more flexible, or improving gender diversity in lower paying jobs like apprenticeships or entry level training programmes.
“This is an inevitable consequence of having simple measures of average pay, rather than participation in work – and employers will want to use their narratives to report on changes in both.”
Ben Willmott, head of public policy at the CIPD, added that a broad range of approaches was required to tackle the gender pay gap, in particular strategies that would retain women in more senior roles.
“We know that women are more likely to take time out in order to care for children and to work part time,” he said. “So the key issues for employers are to think about how they can create more flexible working opportunities and make sure they can create more senior level part time roles.”
New measures introduced by the government in April 2017 mean that companies with 250 employees or more must calculate and provide information on their gender pay gap for the first time, including the average hourly and bonus pay for male and female employees, the median salary for both genders and the number of men and women in each pay quartile.
With the deadline for the second round of reporting looming, research by the Equality and Human Rights Commission (EHRC) published in December found only one in five employers had published a plan outlining how they were going to tackle their gender pay gap.
The CBI warned that longer term demographic issues meant attracting diverse talent could become more difficult over time. It suggested businesses would need to be able to demonstrate clear progress on gender pay within three years in order to remain attractive to candidates.
Willmott added that more diverse shortlists and supplanting interviews with more task-based recruitment processes all helped the recruitment and retention of senior women.
“Women will only be able to progress to more senior roles if there is a culture of support and other practices around retainment and progression that will enable them to reach their potential in that organisation,” he said. “Recruiting at an entry level is just the start of the story.”
“It will take some time for the gender pay gap reporting regulation themselves to lead to sustainable change… [in 2018] only a third of employers provided additional narrative around the actions they took to close the gender pay gap,” he said. “The numbers only take you so far and the key thing is the practices around people management and development.
“The CBI survey suggests there is an appetite for change and that issues around gender diversity are being taken more seriously, but I think it’s a work in progress.”