Q. One of the criticisms of pay gap reporting is that, without action, it is useless. How can organisations take their pay gap data and turn it into an action plan to improve equality?
A. Gender pay gap (GPG) reporting legislation came into force in 2017 for all UK companies with more than 250 employees. Over the last five years there have been many criticisms of it in terms of how it is constructed and applied.
One of the key concerns is that GPG reporting legislation doesn’t require orgnisations to take action, nor are there any penalties for failing to act.
That said, consequences for not reporting can result in an investigation by Equality and Human Rights Commission (EHRC).
Organisations are required by law to comply and failing that, potentially subject to action being taken including fines.
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While companies are reporting on figures to comply with the law, and the submission of action plans with annual figures is encouraged, these action plans are neither mandated nor, in most cases, translated into sustainable change.
In fact, the gender pay gap is widening and 2022 will bring forth a compounded effect of both the pandemic and government having granted a six-month suspension for the 20/21 reporting year due to the impact of Covid-19 on organisations.
Action plans should ideally not only address pay inequality, but also put in place solutions for greater equity, as well as institutional change through changing the system.
Equality means people are treated the same. Equity recognises there is an unlevel playing field and requires treating people differently, whereas systemic change looks at barriers and blockers in the system such as policies, processes and procedures.
Therefore, action plans must be an amalgamation of the three approaches. Some considerations when developing gender pay action plans are below:
Representation – Numbers matter. More women in lower percentiles and/or more men in higher percentiles will result in organisations having a greater gap.
Organisations need to look at data patterns over the last few years and this analysis is vital to feed into leadership meetings for conversations about GPG action plans and demonstrable progress against them.
Progression – Representation, i.e. demographics is one thing, internal mobility and progression is another.
Tracking progression of women vs men can flag where there is a disparity between distinct groups and/or departments and flag internal barriers and bring about valid conversations on any underlying biases.
Layers of identity – To better understand your GPG data, it mustn’t be viewed solely with a lens of gender. Additional layers should be analysed to see where there may be a compounded and intersectional effect, such as race/ethnicity, age, social class, sexual orientation, without even considering the extra care responsibilities often being placed on women outside of work.
Equality impact assessments (EIA) – Run these impact assessments regularly and establish a baseline from when it was first done to determine what is shifting from positive, negative or neutral impact.
For best practice, EIA should also be conducted, as a useful data point during any transformation programmes as well to track other plausible variables impacting GPGs.
Correlation to work/life choices – Gender pay data should be correlated to groups opting for more flexible and agile work patterns. In addition to general data monitoring and reporting, look for new information emerging where certain groups may have slower rates of progression, which may point out presence privilege or presenteeism bias rearing its ugly head.
Additionally, anticipate potential risks from stereotyping or assumptions being made due to virtual and hybrid working practices. Let the data evidence the storytelling.
Definitive goals and language – Use realistic, firm yet stretchy targets. Identify definitive dates, articulate the change to be brought about, as opposed to using language such as ‘we will review’, ‘we are committed to’ or ‘we will continue to work’. The right language improves accountability.
Huma Qazi is a diversity and leadership consultant and founder of The Privilege Project
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This piece appears in the March/April 2022 print issue. Subscribe today to have all our latest articles delivered right to your desk.