An opportunity to be bold for gender pay equality

Blog posts

8 Mar 2017

Catherine Rickard, Senior Research Fellow

Did you know that today, International Women’s Day (IWD), is an official holiday in many countries? It is even customary for men to give their wives, mothers and female colleagues small gifts and flowers on this day. Unfortunately, in the UK, it is not a public holiday and I’ve not received any presents. It is, however, a day on which we can celebrate women’s achievements and reflect on the core values of IWD, including that women should receive and access the same opportunities and benefits as men.

However, more than four decades after the Equal Pay Act, the UK still has a gender pay gap (18.1%) higher than the EU average (16.7%), which is no cause for celebration. Former prime minister David Cameron had a lofty ambition of wanting to ‘end the gender pay gap in a generation’ but that kind of intention requires bold change. This year’s IWD campaign theme is #BeBoldForChange, with the ambition of encouraging groundbreaking actions that will drive great change for women. IWD 2017 also falls just one month ahead of the implementation of the new UK duty requiring large employers to publish their gender pay gap data. This is an attempt by Government to try and drive change in workplaces across the UK, following the failure of the voluntary approach to encouraging equal pay audits; as shown by the poor levels of reporting achieved through the Government’s Think, Act, Report initiative. The initiative set out a voluntary framework for gender equality reporting and aimed, but failed, to drive a culture change towards greater transparency.

The move to mandatory reporting is heralded by The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 which apply to private- and voluntary-sector organisations with 250 or more employees. These companies must calculate their gender pay gap from 5 April 2017 and publish their data on a company website by April 2018. The regulations require organisations to publish six metrics: the mean and median gender pay gaps; the mean and median gender bonus gaps; the proportions of men and women in receipt of a bonus; and the proportion of men and women in the earnings distribution by quartiles. There is no legal requirement to publish any accompanying commentary to explain these figures, however, companies may choose to do so in order to add context to their data. For public sector organisations, draft regulations requiring these employers to report their gender pay gap figures were published in January 2017 under the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 and will come into force on 31st March.

Despite this move towards transparency, what is distinctly lacking is a requirement to take action to actually close any gender pay disparity. Organisations will have to comply with the new regulations by calculating and publishing the required statistics; yet there is scope and opportunity linked to this exercise for organisations to really tackle inequality within their organisations and promote change. Organisations could undertake a full equal pay audit as set out by the Equality and Human Rights Commission, to examine and understand their pay gaps, and they could develop plans and actions to address the gaps effectively. These actions could include, for example, developing more female senior leaders, line manager training, changes to recruitment and talent management processes, as well as actual pay changes such as the introduction of job evaluation.

Last year, IES studied the success story of how Lewisham Council has achieved a near-equal gender mix at the top of their organisation and how the glass ceiling impact on senior executives has been overcome. So, as encouraged by this year’s IWD campaign theme, #BeBoldForChange with a proactive approach to gender pay reporting and take the action needed to drive real change for women in the workplace.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.