4 strategies for reducing your company's gender pay gap

Home 4 strategies for reducing your company's gender pay gap
23 Sep 2020
For HR professionals

The gender pay gap has existed since women entered the workforce and continues to limit and restrict women in every occupation and industry today. The government's gender pay gap initiative (introduced in 2017) makes it compulsory for employers with 250 or more employees to publish their data comparing men and women's average pay across the organisation. However, creating a fairer workplace for all will only be achieved when every company makes a concerted effort to measure and narrow their own gap, regardless of their size or statutory obligation to do so. Despite these regulations coming into effect, on top of the Equal Pay Act 1970 (which prohibits less favourable treatment between men and women in terms of pay and conditions of employment), it is a stark fact that men are typically still paid more than women for doing work rated of equal value. It largely comes down to a few key factors, which can all be monitored and improved by any company willing to step up to the plate. Here are some strategies for closing the gender pay gap at your organisation, whatever the size of your workforce.

1. Produce an annual narrative report

Whether you're required by law to report your gender pay gap or not, organisations should consider publishing a narrative report which offers an analysis of employee salaries by gender (including a breakdown on roles, hours and promotions). The process of producing a document like this will undoubtedly help you to identify any shortcomings and give you the opportunity to introduce an action plan to close your gap. Being proactive and committed to an annual gender pay report will demonstrate your commitment to equality, both to your own workforce and to your customers, partners and suppliers. So how do you do it? You'll have the facts and figures about salaries and promotions already to hand so your numerical data shouldn't be too hard to collate and interrogate, but you'll also want to explore the narrative around these numbers. You could assemble a team of women and men from across the organisation (ensuring every department and pay grade is represented) and ask them to explore what internal factors contribute to income inequality. This accountability can improve the representation of women in your organisation and also reinforce a diverse and inclusive culture. You (and they) will want to look at employee compensation (salary, benefits, bonuses, overtime etc.), diversity in management (men tend to dominate the senior levels in most companies - if there are less women the further up the ladder you go, it’s a sign there is a systemic problem) and your hiring practices around salaries (do you offer a salary based on a candidate's previous earning level, or advertise without stating a salary?). 

2. Offer genuine flexible working opportunities

This is an easy one, but can make a huge difference. It is not uncommon for women to work reduced hours to allow them to manage family commitments, or to return from maternity leave at a more junior level than the role they left, which unavoidably reduces their income. Flexible working would allow women to commit to full-time work without jeopardising their other commitments (or level of seniority) - and it would enable the men in your workforce to contribute more to the childcare or other restrictive logistics at home so their partners can lean in more to their careers. Both the House of Commons and the Women and Equalities Committee have acknowledged flexible working for all ‘lies at the heart of addressing the gender pay gap’. As a result, companies should seek to implement flexible working practices, by having a flexible working policy (and associated application process).

3. Make promotions and pay rises transparent

Organisations should have transparent processes for promotions, pay rises and bonuses, and should communicate clearly the equal opportunities for internal progression. Having structured and skills-based interviews will reduce unconscious gender bias and make it easier to recruit ethically and fairly across all intersections of diversity. Campaigners are calling for a change to the law allowing women to request salary details of male comparators if they suspect pay discrimination. While employees do not have the automatic right to know what someone else earns, they do have the right to know how salary increase calculations are made. So it is essential employers have a clear criteria in place and keep accurate records of deciding factors when decisions are made. 

4. State a salary when advertising roles 

Openly discussing salary is still seen as taboo, but your organisation should be able to organise its roles into bandings which have an upper and lower boundary. Therefore, it would be possible for any employee to know the banding of any colleague in any department, all the way up to the CEO. While this goes some way towards addressing a potential gender pay gap issue, it doesn't mitigate against men typically earning at the higher end of the bracket and women tending to be towards the bottom. This can sometimes be down to the differences between men and women when they negotiate on salary (whether that's a starting salary in a new role or a promotion). Men are far more likely to ask for more and therefore end up in higher starting salaries than women in the same role with the same skills. Two ways you can reduce the impact of women under-negotiating their earnings is to state the salary (or salary banding) in your job adverts, and not to ask a candidate what they currently earn. This has been shown to manifest in women being offered (and accepting) roles at the lower end of the pay scale, despite their comparable level of ability and experience.

Smashing the glass ceiling

In a nutshell, you want to end up contributing to a fair and inclusive workforce - people want to be paid fairly, see more women in the C-Suite, be supported by clear training and development opportunities and have transparency on a company's gender pay gap (and what you're doing to address it). Whatever steps you take towards this are all mini hammers against the glass ceiling that future generations will be grateful for.

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