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Progress on gender and ethnicity pay gaps stalls

Little progress has been made on reducing gender and ethnicity pay gaps, but support for their publication is growing, according to new research.

Half (49%) of companies made little to no difference to their gender pay gaps between 2019 and 2020, according to figures released yesterday (27 January) by wellbeing and financial consultancy Mercer.

While nearly a third of UK employers managed to reduce their gender pay gap by more than 2% in that time, almost one in five (18%) saw their gender pay gap grow.

Despite 2020’s lackluster performance, including a hiatus in publishing gender pay gap results, many companies are warming to the idea of declaring their progress publicly.

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So far, almost three quarters (74%) have published their 2020 gender pay gap data, even with the suspension of government enforcement (figures are generally published the year after, to take account of bonuses, for example.)

Jemima Olchawski, chief executive of women’s charity The Fawcett Society, told HR magazine that there are many options available to narrow the gender pay gap.

She said: “Collecting and publishing data is a solid start and helpful in terms of assessing the problem but we need to see real action being taken.

“Employers need to put in place systems that break down the barriers that prevent women, and in particular women of colour, from thriving and progressing at work.”

This, she added, could mean better provision for flexible working, increased internal pay transparency, and no longer asking salary history when hiring.

She said: “Gender pay gaps thrive when there are too few women in positions of power. Giving women a fair chance of promotion is a way to retain talent and improve pay gaps.

“In short, employers need to understand why they have a pay gap and take swift action to close it. This will benefit not only women but the organisations they work for too.”

Gaining popularity, too, is the idea of publishing ethnicity pay gap data. Though fewer companies publish their data, the number that did tripled (from 3% to 9%) between 2019 and 2020.

Most (65%) employers asked by Mercer said they would support government-mandated ethnicity pay gap reporting, just like the gender pay gap.

Few, however, want to publish figures before their competitors do.

Seven in 10 (69%) don’t plan to release ethnicity pay gap statistics until they are forced to by law or public scrutiny.

Michelle Sequeira, diversity, equity and inclusion consulting leader at Mercer said that, to truly make a difference, employers should look beyond the pay gap.

She told HR magazine: “An organisation should ensure there is equity in experience, opportunity, and pay. 

“What that means is hiring and promoting the right people that will meet the organisation’s business strategy.”

To do this, she added, companies need to open up access at the hiring stage, hand out key projects and opportunities equitably, and remove bias in process and policies to make equity a fundamental part of employees’ experience of the company.

Sequeira warned, however: “The solution will depend on the organisation; there is no silver bullet and therefore understanding their current state is pivotal to knowing what will make the most impactful difference.”

Until then, she said, it is important companies keep publishing their pay gap data.

Sequeira added: “The pay gap publications certainly put D&I on the board agenda and are making it a priority to narrow the gaps.

“Continued publication will keep accountability and dedication high.”


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