Are you dreading April’s gender pay gap reporting deadline? If so, you’re not the only one. Nobody wants to follow in the footsteps of those who’ve disclosed their numbers and come under fire for it. So, here’s what you need to know about those figures and how to avoid a public backlash.
The best defence to the demand for transparency is to provide yet greater transparency. Being honest about your gender pay gap – why it’s there and what you’re doing about it – can actually build trust. However, raw data without context can be interpreted in many negative ways, so don’t let employees or the press write that story for you.
This point was made clear by the public’s reaction to the BBC’s figures on 96 of its stars’ salaries. It’s being held as an example of the need for discussion around the numbers.
Despite the fact that its overall gender pay gap of 10 percent is eight percent better than the UK average, the BBC was maligned for the considerable variation in pay among its top presenters. It revealed a high level of detail – which includes names and individual salaries – not under legal duress but because, as a publicly funded organisation, its customers expect visibility. Yet while the BBC ticked the box for transparency, it forgot the need for dialogue.
Other companies that didn’t report with as much detail were still hit. The UK challenger bank, TSB, revealed a 31 percent gender pay gap while the Financial Times is at risk of industrial action for its 13 percent difference. The first on stage were always likely to get the loudest boos, but this is largely because they suffer from a lack context, comparison and backstory.
Elizabeth Lang, Partner at Bird & Bird, says: “Very few of our clients have published their data. They’re discussing internally and within industry groups how to present those statistics and where they stand compared to others. The biggest issue for business will be PR, such as publicising the initiatives they have underway to redress the gap in gender pay.
“For example, the regulations cover hourly rates while the BBC’s data does not. Had it done those figures and added commentary, public reaction may have been very different,” she adds.
Sir Michael Lyons, Chairman of the English Cities Fund and former Chairman of the BBC Trust says: “The BBC showed it’s simply not enough to provide the cold figures – you’ve got to give a commentary that helps the public and employees understand how those numbers relate to the company and sector.”
Yet like most, Michael is in support of the legislation and the feedback that will come with it. “It requires determination to change the composition of your workforce and I think the practise of opening up your statistics so you learn and hear people’s commentary on them is invaluable,” he explains.
Context is key
Dave Newborough, UK HRD at E.ON, has used the government’s call for data as a means to better understand the business and how it can improve.
He says: “Recognising that the mandatory reporting requirements don’t tell the full story, we took the opportunity to dig deeper into the data and conduct further analysis to help understand the true picture of gender pay within our organisation.
“That validated what we always believed to be the case – that the underlying cause of any gender pay differences in our business is the under-representation of women in middle and senior roles, rather than material differences in pay for men and women doing the same or similar roles,” he says.
This point is crucial to the manner in which gender pay data should be interpreted and communicated. Indeed, for Tracey Hahn, HRD at Old Mutual Wealth, the most critical PR message to send to stakeholders is the difference between gender pay and equal pay. The former refers to the overall pay variation between the genders, while equal pay – which has been a legal requirement for 47 years – means men and women are paid the same for doing the same job.
“I doubt the general public will distinguish the difference between gender pay and equal pay. The financial services industry has worked hard for equality, but there is still work to do at the executive level, which exacerbates the gender pay gap. The key challenge for us is the pipeline for female executive roles as that is really driving the problem,” says Tracey.
“We’re taking a very educational approach in showing our employees the difference between equal pay and gender pay. We’re looking at internal messaging and are working with an employee forum during each annual pay cycle,” she adds.
Benchmarking for best practice
While the numbers demonstrate what most businesses already recognise – that there are not enough women in senior roles – they can also add impetus to actions.
“It’s only by knowing the full extent of the problem that it can be properly addressed – and sharing those issues can create the fuel to do something about it,” says Phillippa Crookes, Relationship Manager at Criticaleye. “Clearly, there is a problem with gender pay, and for some it’s a business imperative.”
As Tullow Oil’s EVP of Safety, Operations, Engineering and External Affairs, Sandy Stash is one of the few women to hold a senior role within her industry. She argues: “These statistics will be helped by more women being pulled through the ranks, which needs to happen. There is a delta between the genders and in our industry, I expect quite a marked one. Technical roles are paid more and we have fewer women in those jobs.”
There is particular urgency in oil and gas, which is competing against other sectors for young talent, as Sandy explains. “In energy, we have a huge demographic issue coming upon us in that large numbers of people who entered the industry in the late 1970s are coming to retirement. In order to get the best talent the industry has got to be attractive. Companies therefore need to understand where they sit among their competitors and among other sectors.”
“This common metric is great in that it allows companies to see where they are in comparison to their competitors,” Sandy adds. “Realistically there is never going to be a perfect tool, but this one is an important one to start the conversations.”
If mined and examined in detail, such data could also help companies locate particular areas of weakness. For some it may be their return to work policy for new mums, others may have issues with recruitment, or pay progression and performance management. For it to be effective, gender pay reporting must therefore be approached alongside other laws and voluntary initiatives.
“This regulation is positive and a step towards greater transparency and accountability, but the difference has to be wider,” says Tracey. “The legislation I got most excited about recently was that on paternity leave, because the more you can even out people coming and going from the organisation the more weight it takes from women. I hope that regulation’s taken up with great acceleration.”
According to the Office for National Statistics, 41 percent of women work part-time versus only 12 percent of men. That’s largely because the majority of home childcare is covered by women.
“Part-time employees often get paid less than their full-time counterparts and many mothers return to work on a part-time basis, which affects the figures. Both men and women want greater flexibility in working hours and delivering that will help address the gender pay imbalance,” says Bird & Bird’s Elizabeth.
It’s not surprising that with such a complex issue the answer is not simple. As Phillippa says: “While gender pay gap reporting is by no means a solution, it opens up important discussions, highlighting the scale of the issue and getting people talking about the many ways in which it can be tackled. That can be painful for some, but uncomfortable conversations often deliver the most value.”