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Is gender pay reporting encouraging businesses to abandon family-friendly benefits?

12 Feb 2018 By Iain McMath

With women more likely to take up these initiatives, employers may be tempted to drop them to improve their numbers, warns Iain McMath

We’ve come a long way towards making work more family friendly. Benefits like extra holiday and flexible working make a massive difference to working families, and childcare vouchers are also a big help to their wallets. 

Childcare vouchers are among the top three employee benefits, while nearly 60 per cent of women with children under four work flexibly. These initiatives help thousands of families balance their work and personal lives – and their budget, too. They also help companies hire and hang on to a more diverse and talented workforce. 

Here’s the catch – both are now in danger of losing out. The culprit? Gender pay reporting. Businesses with at least 250 staff have until April to publish the difference in pay between their female and male staff. The figures are then published on the government’s website, with only 800 of an estimated 9,000 organisations having put in their reports so far.

These new rules appear to be good news for everyone, as they’ll expose any company that pays women unfairly. There’s no hiding from the stats. The reports lay bare any percentage difference between men and women’s hourly pay and bonuses. Ironically though, the reports might actually be bad news for those businesses trying to do the right thing. The numbers don’t tell the whole story – merely stating the difference between pay rates ignores the benefits someone opts for, or the difference in ‘pro rata’ hours worked by part-time staff. 

Companies can include an explanation of their figures with the report, but there’s no guarantee that the press or public will read them. And that means there’s likely to be an uncomfortable few months ahead for many organisations – including some who don’t really deserve it. 

It’s not just that the reports may be unfair. It’s that some businesses are attempting to make the figures appear better by scrapping family-friendly policies. This is because benefits like extra holiday and childcare vouchers are usually paid for through salary sacrifice. So, if more women than men take them (and they do), this widens the business’s pay gap. Likewise, companies offering senior part-time roles to women will find they’re in the firing line, which could encourage them to drop their family-friendly policies.

On top of this, there is the issue of women who return to work on part time and whose roles include pro-rata bonuses. On the one hand, this arrangement means more women can go back to work if they wish. But on the other, it adds up to more part-time female workers who are getting paid less with smaller bonuses. 

Gender pay reporting will make even less sense, though, if businesses give in to that temptation. If they believe in the benefits of diversity, they’ll have to accept that they might receive unfair criticism. Giving in to the pressure to abandon family-friendly policies to ‘improve their numbers’ on these reports may allow them to save face in the short-term, but the costs in the long term aren’t worth considering.

However, there is good news: companies can and should stand by their commitment to working parents and improve their figures as well. The answer lies in making their workplaces more family-friendly for everyone, not less. Businesses need to actively promote childcare vouchers, holiday and flexible working to men as well as women.

Also, men at the top have an important role to play. It’s not enough to just tell male colleagues about these benefits – they should lead by example. This will actively encourage more men to feel more comfortable asking about and committing to these types of policies.

There might still be a difference in uptake, but organisations can work to reduce any impact on the numbers. And, if they communicate it, they’ll make themselves even more attractive to working parents in future.

Iain McMath is chief executive officer of Sodexo Engage

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