April 2018 was the deadline for private and public organisations with more than 250 employees to report their gender pay gap. More than 10,000 employers provided details of their gender pay gap, and more than three-quarters of them paid men more than women, on average, during the 2017 reporting period. Just 14% of companies reported a median pay gap in favour of women. This week CEO Today hears from Trish Burridge, Director of Consulting Services EMEA at Skillsoft, on why we need to be seeing more women at the top.
With the gender pay gap now firmly on the national agenda, and less than one year until it’s time to report again, companies must make changes to how they pay their employees or face potential reputational damage and poor employee retention.
What has the data shown so far?
Companies that reported wide pay gaps noted a lower proportion of women in highly paid, senior roles. One major retailer, for example, shared information revealing that more than 60% of its lowest paid roles were taken up by women, compared with 40% at executive level.
This is troubling because research shows that more diverse leadership teams tend to be more innovative and produce better business results. In 2017, Boston Consulting Group found that companies with above average diversity scores generated 45% more innovation revenue (the proportion from new products and services launched over the past three years) than those with less diverse employees. There are plenty of intangible benefits too: a more diverse senior leadership team avoids the risk of ‘group-think’. Also, companies that are perceived as more diverse tend to retain employees longer.
Time to take action
The factors preventing women from reaching key senior positions are often endemic within organisations and change will require a broader cultural shift. Here are six steps to help make the change:
- Review pay structures and processes: Are salary rises negotiable or set in stone? Look at how pay awards are decided and awarded, and ensure the process is measurable and equal, rather than based on gut feeling or how skilled the employee is at negotiation.
- Use unconscious bias training: Encouraging managers to recognise unconscious bias in recruitment and performance conversations can help them make decisions in a more objective way.
- Introduce artificial intelligence and automation: Standardising or even automating certain HR processes, such as sifting through applications, can take emotion out of the equation and level the playing field for both genders.
- Review policies against your values: How do your HR, recruitment and training policies reflect the values in your organisation? Review policies, for example, for remote working or time off for caring responsibilities. Ensure that managers understand how to respond to these requests in a supportive and objective manner.
- Communicate the benefits of diversity to line managers: Managers make crucial decisions when it comes to performance management and succession planning, so make sure they are challenging biases and giving everyone an equal opportunity to succeed. Look at the processes they have in place to make these decisions, and communicate the business benefits of having more diverse teams.
- Look at job design: Is the wording in your job advertisements inadvertently favouring one gender or another? Women often don’t feel confident putting themselves forward for a job unless they meet all the criteria. Also, is full-time a non-negotiable or could the role be more flexible?
Now that the first gender pay gap reporting deadline has passed, this is where the work really starts to reduce it. This level of cultural change does not happen overnight. However, by communicating to employees how you plan to tackle gender pay inequality and by opening up a dialogue, your organisation will absolutely be moving in the right direction.