Gender pay gap reporting: how employers can action change
Employment briefing: if you have discovered a gender pay gap, don't just put it down to reasons such as differences in roles but ask why these occur and what can be done to change this
At midnight on 4 April 2018, private businesses with more than 250 employees should have published information about their mean and median “gender pay gaps”, their “gender bonus gaps” and the number of men and women in each quartile of the company’s pay distribution.
As a refresher, the “gender pay gap” is a measure of the difference between men’s and women’s average earnings across an organisation, expressed as a percentage of male earnings.
The Law Society of Scotland published details of its gender pay gap on 3 April, albeit the Society does not meet the 250 employee requirement. This is in keeping with one of the Society’s equality standards for the profession, namely that if an organisation has more than 150 employees, it should publish gender pay gap figures. The median pay gap at the Society is 21% in favour of men. This is perhaps broadly reflective of the profession as a whole in Scotland, with five of the six band 1 (Chambers) corporate firms reporting pay gaps of between 19% and 33%. Crucially, of course, these figures do not include partners’ salaries.
If you or your clients have completed this analysis, published the findings and discovered that a gender pay gap exists, there a number of steps for you to consider in order to reduce this gap going forward.
Consider the reason for the gap
There could be many reasons for a difference in average pay between men and women. For example, as is often the case in the legal sector, you may employ more men than women in high-paying or senior roles, or more women than men on part-time working arrangements. Whatever the reason(s) behind your own or your clients’ gender pay gap, it is important to understand each reason fully in order to action change.
Bring in policies enabling change
The solution is not as simple as increasing pay for women in certain roles and seeing your statistics change overnight. Although pay may be something to review across the organisation, there are policies that could create an environment where men and women have an equal opportunity to progress.
For example, if there are more men employed at senior levels in your business, you should explore the reasons. Review your internal workplace attitudes: are women discouraged from applying for senior positions due to internal attitudes or the required working style? If so, can you change this? It would also be worth reviewing your historical data regarding the application and interview process: do women apply for senior positions but not get the role, or do few women apply at all?
Policies which may instigate change in these areas include transparency as to job requirements at every level, internal succession planning and developing talent from within, implementing an internal mentoring system, ensuring you have role models for both sexes at every level, and mandatory leadership courses for all employees at a certain level of seniority.
If you have identified that one of the reasons behind your organisation’s gender pay gap is that more women are employed on part-time working arrangements than men, it may be an apt time to consider implementing policies and job descriptions encouraging flexible hours. This disparity is often because there are few senior roles available for those who wish to work part-time. You may wish to consider whether you make clear that more senior roles can be carried out on a flexible basis too.
Review your recruitment process
If one of the reasons for your gender pay gap is the higher ratio of male to female employees, it may be a good time to review your recruitment policy and collect data surrounding your interview and offer statistics. Do you attract, and invite to interview, an equal number of male and female candidates for every role? Do you have transparent internal recruitment processes, gender-balanced interview panels and unconscious bias training for everyone involved in your organisation, or at least everyone involved in appointing candidates?
You should seek to remove bias from any hiring or promotion process, and decisions regarding who to interview, who to make offers to, who to promote and who to award bonuses to should be made as objectively as possible.
Whatever the reasons behind your gender pay gap, all organisations should make a concerted effort to understand why this has occurred and how the gap can be closed, and should take steps to close it. There is currently no action plan from the Government to close the gender pay gap within businesses via statutory means, but we expect that, in time, this will be introduced.
Amanda Jones, partner, Dentons UKMEA LLP
See also the feature on p22 of this issue