According to recent research conducted by Cranfield School of Management, 43 of the FTSE 100 companies have no women on their boards. Similarly, in many sectors, women are failing to keep up with men in pay levels. The latest report by the Women and Work Commission found that women in full-time work earn 17% less than men.
While high-profile sex discrimination claims help to push the issue up the political agenda, they are unlikely in themselves to force the pace of change. This is part of a much broader social issue – it is not just women who are becoming increasingly frustrated by the long-hours culture and a lack of work-life balance.
The Norwegian government is threatening to shut down 500 listed companies unless they place women on their boards over the next two years. While it is a virtual certainty that the UK is not going to adopt this approach, there is no doubt that the gender divide will continue to be a hotly-contested political and social issue.
Ironically, the introduction of age discrimination legislation and the default retirement age will exacerbate the problem; particularly at the top levels of management. From October 2006, an employer will be faced with competing interests and legal risks if older male managers in senior roles are reluctant to leave and can work longer. The scope of the objective justification defence will be key, and there will be a great deal of litigation on this point.
Failure to take steps now to determine whether there is a gender divide in your workforce will leave you exposed to claims and, more importantly, you will miss out on valuable skills and a broader pool from which to recruit and promote. More women than men are coming through further and higher education. Put simply, it is a waste of valuable resources not to embrace the equality message, and if you aren’t acting now, this could prove costly in the long term.
Your strategy should include:
- Analysis of your workforce
- Addressing any issues by effective use of flexible working, appropriate training, effective use of secondments and sabbaticals
You will need to understand the dynamics of your workforce:
- Are women under-represented at particular levels or in certain business lines or sectors?
- Are there pay differentials between men and women?
- What is the age profile at middle management and senior management levels?
If your organisation’s retirement age is below 65, you will need to consider the impact of the age regulations that come into force this October. If you plan to retire employees before 65 to make room for promotions, you will need to objectively justify that decision. This is likely to cause difficulties if you find yourself faced with objections to retirement before 65 and requests to work beyond the default retirement age.
Many senior managers may be keen to stay on longer, particularly if their pensions fail to meet their expectations (as is increasingly the case). If that is likely, you will need to start thinking about how you are going to manage that.
What can you do?
Use the objective justification defence. Disputes about what this means in practice will ultimately have to be tested in the courts. However, you should now be considering the following:
If your senior managers remain employed to 65 (and beyond), will this create a log jam at the top of your business, which will affect middle management coming through?
What impact will this have on bringing new skills into senior management levels?
Government guidance provides a non-exhaustive list of possible legitimate aims that might be objectively justifiable. The most useful one is to argue that it is a legitimate aim to be able to facilitate employment planning. Clearly, if there are no realistic promotion prospects within a reasonable timeframe, talented individuals are not likely to join your business, and they are certainly not likely to hang around.
You will need to be able to point to analy-sis supporting this assertion.
Do not be scared to reject requests to continue working. The duty to consider procedure is legally less onerous to comply with than the current flexible working requests, as you do not have to give detailed reasons.
You should consider extending flexible working policies across your workforce. This recognises that it isn’t just women or parents who want a better work-life balance, and will ensure that flexible working is not seen as just a ‘female’ issue.
When advertising, make it clear that flexible working proposals will be considered. Of course, you must not make guarantees.
Training initiatives can only work with senior management buy-in. You will be in a stronger position if you can show you took all reasonable steps to prevent the discrimination from occurring. The threat of personal liability usually focuses the mind during a diversity training awareness session.
Other training initiatives could include:
- Targeting teams/departments where claims or grievances are raised
- Introducing coaching for potential high-fliers
- Ensuring diversity awareness training is considered as part of an appropriate disciplinary sanction.
Secondments and sabbaticals
Use internal secondments to their full advantage. They enable you to move individuals around and develop skills in areas they may not have otherwise considered. This could also be part of a talent management programme. Consider using them to cover leavers or project work as well as maternity-related absences or long-term sickness absences.
Sabbaticals offer an excellent opportunity to enable employees to have some ‘time out’ without actually having to resign. However, be clear when documenting this, and think carefully about the likely take-up and the length of time you will allow people to take.
Introduce workplace nurseries or other cheaper options such as childcare vouchers and return-to-work bonuses. You must ensure these are properly documented.
Natalie Godfrey is an employment partner at Stephenson Harwood
Legal pitfalls to avoid
Positive discrimination: Positive discrimination is unlawful. Do not mistake it for positive action. You can target recruitment campaigns or training at women who may be unrepresented at senior levels, but you cannot offer senior roles to women on the basis that they are women.
Falling foul of the age discrimination regulations and unfair dismissal protections : Don’t assume you can rely on a lower retirement age to remove senior executives prior to the age of 65 to make way for up-and-coming female talent to create a more balanced management team. You must demonstrate that you have a legitimate aim (such as employment planning) and you are achieving that legitimate aim in a lawful and proportionate manner for promotion. You must also ensure you follow the procedural steps to avoid an unfair dismissal.
Collating statistics but taking no action: Any statistics you collate will be disclosable during litigation (including sex discrimination questionnaires or equal pay act questionnaires). Consequently, if you have this information, you must be prepared to take steps to address
Amending your documentation
You will need to review and, where necessary, amend or create:
- Policies in relation to sabbaticals, return-to-work bonuses and flexible working – for example, contracts of employment to reflect amendments, such as to working hours
- Disciplinary and grievance procedures (clarifying appropriate sanctions)
- Retirement policies
- Talent management programmes (development programmes)
- Standard-form documents recording individual terms of sabbaticals or secondments.