Gender pay gap reporting is just the start of tackling gender diversity, argues KPMG’s Ingrid Waterfield. It’s the action that businesses take based on these insights that will set them apart.Â
With government figures showing the average British woman still earns 81p to every £1 earned by a man, it’s clear that more needs to be done to back up the positive rhetoric we’re hearing from many senior management teams about tackling gender equality in the workplace.
Gender pay gap reporting resources
Women earn £8,500 less than men by their 50s
Mandatory gender gap reporting might appear on the surface as just another compliance challenge for both public and private organisations.
However, the statistics will deliver a fresh understanding on what action businesses and government bodies must take to achieve real change on gender diversity – in effect, there will be nowhere left to hide.
Together with providing a platform to showcase how they’re tackling the issue, it will challenge leaders to treat gender diversity with equal prominence to other business issues and give executive teams and boards the data they need to understand where improvements are needed.
On the other hand, there is also the risk of reputational damage – a high gender pay gap will suggest a lack of commitment to equal pay, promotions and development opportunities.
With the first reference date only six months away and current pay decisions likely to be having an impact, there are five fundamental questions every business should now ask themselves to ensure they’re prepared.
1. Can we collect the data?
Accessing, collating and analysing the complex employee data the legislation demands is a significant task, and departments may find they can’t rely on their current HR resource.
Calculating the gross hourly rate for each team member must take into account factors such as paid leave, maternity pay, salary-sacrifice scheme value and overtime expenses, and separating this out, for example, can be very time consuming.
In addition, businesses must develop the infrastructure and process to periodically gather information on all staff and collate it in one place.
2. Can we be sure the data won’t flag any discrimination?
Part of this process will include gathering information on how men and women are positioned across different pay grades, and given the new legislation’s demands for transparency, it’s possible that discriminatory practices on pay and promotion may emerge.
Having the full analysis completed early will enable businesses to address any potential issues, through protection of legal privilege to guard against the risk of disclosure in the short term and putting internal processes in place to ensure an improved balance in the future.
3. Will our statistics affect our future recruitment?
Unsurprisingly, gender equality is a top concern among female undergraduates. KPMG’s “Think Future” research found more than half (55%) would be influenced by a sector’s reputation on gender diversity when considering a job, compared to just over a quarter of men.
A business’ standing on equality is likely to have a similar impact, so organisations must put a plan into action that will minimise their pay gap and ensure they can attract top female talent.
4. What is our strategy for addressing gender diversity?
Having clear targets in place is key to achieving this. It’s important that diversity is treated as any other major business issue that requires improvement, and embedding targets at senior management levels will enable the accountability and responsibility required to accelerate change.
However, these shouldn’t just be governed by national or sector averages. HR leaders must have a broad understanding of what their workforce looks like and the scale of the pay gap at each level to ensure the goals set are achievable and gain board buy-in.
To meet targets, HR teams must work with the business to deliver systemic change to company culture. Ultimately, eliminating the gender pay gap rests on having equal representation at each level of an organisation, and with men dominating senior management, this means taking active steps to bring more women to the top table.
5. What can we change?
HR leaders will need to support leaders and managers across the organisation on creating a culture that enables women to thrive in their careers to the same extent as men.
Processes and policy should be re-engineered to develop female talent and boost the numbers applying for and achieving senior promotions. Providing more targeted support to women on long-range career navigation, delivering appropriate training opportunities and normalising flexible working hours must be prioritised. It’s not about positive discrimination, but fairness.
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The findings of KPMG’s Revisiting the Executive Pipeline research, which found men still hold at least 80% of board and executive committee positions, suggest many businesses still face a significant challenge.
The onset of gender gap reporting has increased the urgency for action, and by prioritising these questions companies will put themselves on the road towards reaching a more inclusive culture and gender balance.
