'Gender Pay: A moving target'... but one where more transparency and HR action will help

Blog posts

23 Mar 2015

This blog was originally posted on the CIPD rewardblog

Duncan Brown

Watching Gemma Arterton and cast on the West End stage humorously representing the misogynistic views of male executives and trade unionists at Ford in the 1970’s and resulting Equal Pay Act finale, reminded me that I have been working on equal pay ever since, starting work then as a ‘green’, graduate Personnel trainee up the M1 at Vauxhall in Luton.

But with my own two girls soon to be entering the full-time labour market, I think they would probably rate their dad at a ‘C-/needs improvement’ level based on our progress in closing the gap since then. Indeed, rather than this suggesting that the issue has been addressed by the brave actions of those seamstresses who un-Made the gender pay gap in Dagenham, Bill Murray’s Groundhog Day might be a better representation of how I have felt for long periods over that time.

The pay gap halved virtually overnight when the Act was passed. But progress since has been intermittent at best. Political squabbling over minor statistical blips apart, most of us agree that the gap appears to have ‘stuck’ over the past decade in the UK, at around 10% if we compare male and female full-time employees, and a depressing 20% in terms of all-worker mean earnings.

An excellent seminar on the topic at Brighton University this week, Gender Pay: A Moving Target, in collaboration with the Equality and Diversity Forum Research Network, reviewed the latest international academic research, contained in a special issue of the Cambridge Journal of Economics

Professor Jackie O’Reilly’s overview highlighted the complexity of the issue in shifting labour markets and economies with very different legislative contexts. While the overall pay gap has tended to fall in many countries over the past forty years, it has not closed; in countries like the UK and US it has been stubbornly resistant, or has even widened.

In reviewing the collection of papers that make up the special issue the researchers identified four broad themes: conceptual debates over the natures and causes of the gap; legal developments and their impact; wage-setting institutions and changing employer demands, for example for flexibility; and newly emerging pay inequalities between and within educational and ethnic groups. As Jackie perhaps not surprisingly concludes: “progress towards closing the gender pay gap will not be easy, will require a collective effort of various actors, and will not be quick”.

Equal pay expert Sheila Wild’s view based on many years of personally fighting the gap was that we have had “too much research and not enough action”, by government and employers. My fellow panel-member Jason Kitcat, the Green party’s Head of Brighton & Hove City Council, certainly illustrated the courage and leadership that can be required to close the gap in individual employers, when the funding and employee relations issues had defeated attempts to deliver single status there for more than a decade.

While participants may have differed on the emphasis they gave to various ‘solutions’, all of us I think agreed on the benefits of greater knowledge and disclosure of information, internally in respect of the results of equal pay audits and more widely through the external disclosure of gender pay gaps on a consistent basis . A review by the Equality and Human Rights Commission found that “transparency brings a number of benefits, including better quality decisions about reward, employee confidence in the reward process and an enhanced corporate reputation”.

The EHRC also provide excellent free guidance on how to carry a voluntary EPA.

The reliance on voluntary employer action however, by successive governments and supported by most business leaders in the UK, has been an unmitigated failure. Awareness of the current administration’s ‘Think, Act, Report’ initiative is low. Only 270 of the 7,000 UK companies employing more than 250 staff have got involved and just five of these have published their gender pay gaps. Less than a quarter of private sector employers have carried out an equal pay audit and only a tiny percentage of these have published the results, internally or externally.

Yet while working with the EHRC, when we ran a poll asking women if they wanted to know what the gender pay gap in their organisation was, guess what? 98% were in favour. The CIPD’s website poll last week found that 84% of us were in favour of forcing firms to publish their internal pay ratios and in respect of gender pay, amongst a majority female profession, I suspect the level of support would have been even higher.

The UK has a history of a relatively high number of equal pay claims compared to other countries. The introduction of fees for claimants, unlike external reporting or compulsory EPAs, was not a step too far for the Coalition, and as the TUC points out, in 2013/2014 employment tribunal figures show a drop in equal pay claims of over 70%, though only a small decline in the actual number of cases.

So it was with an air of disbelief that I learnt the day after the Brighton seminar that this Government, through an amendment to the Small Business, Enterprise and Employment Bill currently winding its way through Parliament, is to introduce mandatory equal pay reporting for larger companies. The clause, proposed by Baroness Thornton, will require larger employers to “publish information showing whether there are differences in the pay of male and female employees”. The power was already contained in Section 78 of the Equality Act 2010. But it has never been actioned and most of us assumed that it had been permanently side-lined. The new legislation will say that the change must be implemented “as soon as possible, and no later than 12 months after the passing of this Act”.

Mandatory reporting of the gap won’t automatically close it. But as Ian Powell, Chairman of PwC, one of the five firms which have already published their pay gap analysis, said this week,

”we have found that data and targets can be useful in focusing where we should be targeting our efforts…It’s hard to say how long it will take to achieve real gender equality, but we know that by identifying and measuring the problem there is a much better chance of building and sustaining workplaces where all talented people can grow their careers with equal opportunity”.

The EHRC has promised in their Parliamentary briefing on the Small Business Bill to produce a tool kit to help employers measure, report and address any pay gaps.

HR and reward professionals now have the chance to lead rather than lag this agenda, to convert and provide the support and tools leaders like Ian Powell need to analyse and address any significant gender pay gaps that are found. I don’t want my girls earning 20% less in their careers because of their gender: now is the time for all of us in HR to follow the example of those Ford workers and take the lead.