Mind the pay gap
12 April 2018
This article was featured in the May 2018 issue of the magazine.
Oliver Shaw, chief executive officer of Cascade HR, discusses the impact and effect of this pivotal milestone in the journey to workplace equality
After months of media headlines and shocking gap discoveries, the long-awaited deadline to publish gender pay reports finally arrived on 4 April. However, the profound impact of some findings may mean that the dust will never settle on this complex subject of equality.
Anyone who ever thought that the life of a payroll or human resources professional is straightforward, must have overlooked the magnitude of change introduced to the workplace over the past few years.
In 2017, one of the most talked about topics was gender pay reporting. For many organisations, the legislation posed another administrative headache for already stretched payroll teams. But in other businesses, the reason for the apprehension was far more concerning as it had the potential to unveil inequality – if not exploitation – on a disgraceful scale.
At the turn of 2018, as the reporting deadline loomed, debate surrounding gender pay started to heat up. An article in the Telegraph (https://bit.ly/2G9ayel), for example, revealed that in many of Britain’s major organisations women are often paid less than half that of their male colleagues. Two brands particularly attracted scrutiny: a gap of 52% reported at easyJet and a staggering rift of 65% apparent at fashion retailer Phase Eight.
The disclosure came as no surprise to many payroll professionals, although the employers’ report narratives did attempt to explain the reasons for any perceived imbalance. This was not an equal pay debate after all. Instead, the nature of job roles and the gender of employees who occupied them explained the apparent disparity.
...one of the strands of inequality that still plagues the modern workplace
But this is something that must be queried, not just by employers, but society on the whole. What is the reason for gender role biases in the workplace?
Is it still the case that, to earn excellent money in a senior position, an employee – male or female – must be unswervingly committed to their job with zero career diversions? If they desire a work-life balance, will this impede their earning and progression potential? And to what extent are some people simply better at speaking up to demand greater reward?
In truth, it is undoubtedly a combination of these elements. Many salary models are arguably flawed throughout UK organisations, and gender is not the only factor. Long-serving colleagues are often paid far less than new recruits, for instance, because the employer perceives that an attractive salary is required to entice candidates. How is this fair? In simple terms, it isn’t, and this is what the gender pay reporting legislation is designed to address – one of the strands of inequality that still plagues the modern workplace.
That’s why commentary surrounding the published gender pay reports will surely continue for months. Accompanying narratives will be dissected to assess whether employers can truly and ethically justify the gaps that have surfaced. There may be some acceptable rationale at play here but managing directors and chief executive officers need to be crystal-clear on their clarifications, if only so they can sleep at night.
Now is the time for change. In five years, gaps may be penalised by law. In ten years, it may be compulsory to publicly disclose the earnings of every individual employee. Yet we can be certain change won’t end here. Smaller firms are being implored to produce their own gender pay reports too, even though they are not legally obliged to do so.
It is important that every business starts to actively assess and address their stance on equality. There may even be stand-out cases that should act as a benchmark or inspiration for other larger firms, as there won’t be a gap in every UK company. Some small- to medium-size enterprises are huge advocates of equality and deserve recognition for doing the right thing.
Irrespective of a company’s size, the key advice must be to not brush any gender pay gaps under the carpet. The issue isn’t going to go away. Exploited employees will start to push back, and activists will do their utmost to tarnish brand reputation for the long-term. Lawsuits may even follow.
So, employers need to try and get ahead. This isn’t about creating a spin but devising a solution to redress the balance once and for all. An eye must be kept on the data too, with pulse-point analysis helping to monitor progress. Technology will of course help in this respect, to avoid imposing an administrative burden on payroll teams when the task could so easily be automated.
Employers need to be seen to be acting. Attempts to rectify the situation, for the right reasons, may go some way to diffusing an otherwise potentially damaging business outcome.