Equal pay should head HR’s agenda

Martha How explains the dangers of ignoring a serious gap in gender pay

Too many organisations are waiting to be forced – through legislation or
litigation – to address equal-pay issues. Is it that they are confident that
they are doing everything right, or are they simply daunted by the prospect of
conducting an equal-pay audit? They clearly haven’t realised that if they do
nothing, the costs involved in complying with future legislation or judgments
could be much greater and outside of their control (News, 20 August).

Whatever the reason, their reticence flies in the face of much-used
corporate statements such as ‘people are among our most valuable assets’.
Perhaps companies are failing to see the benefits that equal-pay reviews can
bring to an organisation as a whole.

Addressing equal pay and the range of organisational issues that may emerge
during a review of this nature, would place businesses in an enviable position
of being able to turn those issues to a competitive advantage. The ability to
attract, retain and motivate staff from the widest range will help address
skills shortages, and demonstrating diversity in the organisation should result
in increased motivation and productivity.

By actively addressing the issues that arise, an organisation can help
foster an internal culture that supports the external brand. Compare this with
the impact of negative publicity on an organisation’s employer brand – just
look at the number of equal pay cases appearing in the press over the past few

Employer reluctance may also be fuelled by a fear of what is involved in
conducting an equal pay review, even though this could be an integral part of
the reward strategy. If they adopt a practical and risk-based approach, they
need not make a mountain out of a molehill.

Organisations should first establish an awareness of the importance of equal
pay in the workplace, and then investigate circumstances that may suggest a
high risk of equal pay issues. An example might be large gender disparities in
working groups, perhaps resulting from a merger or acquisition, recent or
otherwise. Circumstances such as these may have led to disparate terms and
conditions, or perhaps the organisation is at different stages of harmonisation
or integration. There could be varying ranges of bonus awards, allocated on
subjective criteria. Clearly, employers need to be prepared to address the
issues highlighted.

Help is at hand too, with the CIPD, Equal Opportunities Commission, Work
Foundation and HR consultants all offering support. There is also the expertise
of the Equal Pay Forum, which offers free membership and aims to bring together
organisations that want to work towards equal pay.

The Government is taking the issue seriously, following the Kingsmill Review
of Women’s Employment and Pay, but is only encouraging organisations to meet
voluntary targets in this area. If this approach fails, the government could
switch to a mandatory approach. It has suggested that it could introduce a
requirement to report on human capital management issues in annual reports and
accounts, with the Kingsmill report recommending an inquiry be set up to advise
on this option. Wouldn’t it be more effective and proactive, to carry out a
review in a timeframe that suits the particular organisation?

While nobody suggests that employers are intent on paying women less than
men – and it is widely recognised that discrimination in reward systems is not
the only reason for the gender pay gap – equal pay is now firmly in the
spotlight. Pressure from the Government, Equal Opportunities Commission and
unions is increasing and, more importantly, there are too many advantages in
acting now for organisations to bury their heads in the sand.

Martha How is a director in the PricewaterhouseCoopers HR consulting

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