Your gender pay gap doesn't matter - what you do about it does

Employers should see gender pay reporting as an opportunity, not a curse.

by Adam Gale
Last Updated: 27 Mar 2018

We are one week away from the deadline for employers to report their gender pay gap. Amazingly, the majority of companies still haven’t submitted. The titans of British industry and commerce are dragging their feet like surly school kids who’ve forgotten to do their homework.

There is no excuse for this. The deadline has been known about for years. The data captured in the reports is from April 2017. It just doesn’t take that long to gather, process and contextualise a few statistics – if they put their minds to it, most firms of any decent size could pull it off in a week.

A lot of companies have delayed out of a potent mix of fear and gamesmanship. Firms are concerned their reports will be embarrassing and harmful to their brand. They’re worried their figures will be worse than their competitors’ or the national average. They’re scared they’ll be outed as hypocrites.

Waiting till the last minute lets them see how their rivals handle it, so they can avoid mistakes and copy clever ideas. It also lets them unveil their bad news at the same time as several thousand other companies, the safety-in-numbers survival strategy.

(Indeed, 1,647 organisations reported in the last seven days, more than the total from April 2017 to March 7 this year.)

But it’s misguided, all this fretting about how horrible or otherwise your gender pay gap is. The real issue is not the scale of the problem, which we already know in principle if not in excruciating detail, it’s what you do with it.

‘If organisations are seeing this as a compliance piece then they have missed the spirit and more importantly, the intent of this legislation. It is an opportunity to measure, track and potentially implement plans/policies to reduce gaps where practically possible,’ says Anthony Horrigan, CEO of Staffmetrix, which is soon to release an app that will allow you to explore the data and measure progress on a micro and macro level.

‘It is acceptable to have a big pay gap as long as the opportunity is seized to understand and tackle it. It is unacceptable to ignore or merely report the figures without attempting to understand what they mean.’

A long, hard look in the mirror

Does your business understand why its gender pay gap exists? Has it set concrete targets for closing the gap? Does it have firm, transparent plans to meet those objectives, and is it holding anyone accountable if those objectives are not achieved? This is how business gets things done. If you care about the gender pay gap, you’ll do something about it.

It may not make good headlines, but a steady commitment to improve will eventually strengthen a company’s reputation. Look at Virgin Money - its gender pay gap was horrible (32.5% median hourly pay) but it published the figures early, and showed the improvement from 36% in the previous year, when it voluntarily published its gap. 

For firms that don't grasp the bull by the horns... well, you know what they say about reputations being slowly gained and easily lost.

‘If employees feel they’re not being fairly rewarded, they’re not going to stick with the organisation. Clients are going to be put off buying goods and services, and investors aren’t going to put money into organisations that are losing people left, right and centre,’ says Charles Cotton, performance and reward specialist at the CIPD.

This is not to say that businesses with bold targets will necessarily be able to meet them. Gender inequality has deep social and cultural roots. If every engineering or research firm demanded 50:50 hiring of STEM graduates, they’d come up against a problem not of their own making. But by pushing for equality, they can each eventually become part of the solution.

Indeed, says Cotton, gender pay reporting is an opportunity for them to explain how. ‘If you’re having trouble recruiting female scientists, can you demonstrate that it’s because there aren’t many female scientists in the first place? Then it’s about what we can do about it as an organisation, from quick wins to things that will take two or three years.’

If we’re not careful, gender pay reporting will be little more than an annual sluice of corporate embarrassment and excuses. But it also has the potential to hold employers to their word and bring about real change. We’ll have to wait long beyond the news frenzy on April 5 to see which it’ll be.

Image credit: MonsterZtudio/Shutterstock

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