Gender pay gap Communicating your gender pay gap. The key steps.
The gender pay gap is a fundamental business issue. It s not just about political correctness, it should be at the very heart of business thinking how to create more diverse environments that engage all of our talent. Peter Cheese
1 Gender pay gap On 28 September welcomed a panel of five highly regarded experts to discuss the issue of the moment the gender pay gap: Cherie Blair CBE QC, Founder and Chair of Omnia Strategy LLP and Founder and Patron of the Cherie Blair Foundation for Women Greg Campbell Partner in the Employment Department at Mishcon de Reya Sarah Churchman HR Director and Lead on Talent, Diversity, Inclusion and Wellbeing at PwC Peter Cheese CEO, CIPD Claire Harvey MBE Paralympian and CEO of Diversity Role Models Thanks to some challenging questions from the audience, the debate was passionate and informative, giving everyone lots to think about. We have combined the learning from this session with our own insights gleaned from working through the issue with our clients to provide a 101 guide to communicating your gender pay gap.
2 Gender pay gap What s required? Employers with 250 or more employees must publish statutory calculations showing how large the pay gap is between their male and female employees by 4 April 2018. This applies to multi-national companies with employees in the UK. The six stipulated calculations must be published on the company s website and uploaded to the Government website. It can be accompanied by a narrative and action plan explaining the figures and what next. Companies need to publish figures for UK employees only ie, employees with a contract governed by law in Scotland, England and Wales. Companies that have a gender pay gap will not be subject to any penalties. It is important to remember that gender pay gap reporting is different to equal pay legislation. Equal pay deals with the pay differences between men and women who carry out the same jobs. It is unlawful to pay people unequally because they are a man or a woman. While a large gender pay gap may indicate wider issues around equality of pay, it doesn t necessarily mean a company is acting contrary to equal pay legislation. This is an important distinction to make in a company s narrative.
3 Gender pay gap Top 5 questions companies should think about now 1. If there is a gap why? Is it because of representation or fewer men/women in senior roles or the structure of the organisation (eg, a partnership structure so partners are excluded)? 2. What are you doing to address the gap? Is there a strategy for change? Measures to address the gap such as recruitment, flexible working, promotion practices, culture changes, talent development. Have you set new targets to achieve more balance and incentivise change (eg, KPIs for management)? 3. When are you planning to report? If a company waits until just before the deadline or links it with another announcement such as the AGM statement they should be ready to answer questions around why. 4. How are you managing your internal engagement on the back of the announcement? Will this impact morale? Will unions get involved? 5. Is this indicative of any other underlying equal pay issues in the company? Has the company acted in contravention of the Equal Pay Act?
4 Gender pay gap Step 1 We ll see a lot of variability across industry sectors, and across different functions within businesses; and we need to use that evidence to help understand what we re going to do to improve it. Peter Cheese
5 Gender pay gap Step 1 Step 1 Understand your data Completing the six stipulated calculations is no mean feat, but the hard work s not over then. Once the data has been checked and approved, you need to understand what it means poke it, prod it and ask it difficult questions to be clear about why the gaps exist. Top tip Remember Calculating the previous year s numbers may help you to understand your gender pay gap better. It will also allow you to communicate your performance on a continuum, and hopefully, to present your data as a continual improvement story. For the majority, these first gender pay gap numbers won t be good. Businesses should move past this and use the process to understand themselves better and kick-start the changes that need to be made.
6 Gender pay gap Step 2 Step 2 Articulate your story The snapshot deadline has long past and nothing can be done to change your data now. However, you can and we urge, must use the Government s supporting narrative allowance to explain why your pay gap exists. After all, without market and operational context, the data itself is relatively meaningless. Your narrative should explore the following key themes: Market context what s been going on in your sector and regions this year? Business context what s your business make up? Is it a maledominated sector? Is it a top-heavy organisation? Are bonuses only paid to the senior team? Is it a service industry that makes flexibility hard to implement? Workforce changes have any significant factors impacted your data? ie, mergers and acquisitions, or senior maternity leaves, churn, promotions or redundancies. Mitigating measures what actions have already been taken to close the gap? ie, recruitment, development and flexibility policies, processes and initiatives. Signature initiatives are any wider inclusion and diversity initiatives in place to close the gap over time? ie, education programmes to build capacity or change norms in the future workforce. Next steps what you are going to do next to reduce the gap further? You might even include targets here to monitor progress and drive change. Top tip Study what peers and front runners are doing. Keep an eye on the supporting narratives already published on the Government website: gender-pay-gap.service.gov.uk
7 Gender pay gap Step 2 Most people will have bad data, that s just a reality. But you ve got to be able to explain how you re going to get better, with concrete steps, not just empty words. Greg Campbell
8 Gender pay gap Step 3 The gender pay gap it s got to be visible to your people internally. Don t forget when you re publishing that you have to provide an explanation to your workforce... The key thing is not to hide it... and to make it available to all. Sarah Churchman
9 Gender pay gap Step 3 Step 3 Communicate with key stakeholders With just six months until the disclosure deadline and more than 97%* of eligible UK employers yet to post their data, organisations need to think carefully about how and when to publish their gender pay gap. Critically, they must also examine how to reach, and tailor their narrative, to priority stakeholders. Important communication touch points to consider: Publish your data and supporting narrative prominently online in line with legislative guidance. Consider key audience online entry points eg, investor hubs, organisational profiles and careers pages. Bring your story to life use infographics and charts to add clarity to calculations and hold your numbers and explanatory narrative together. Use case studies and film to promote key initiatives. Include gender pay gap performance in your annual reporting we strongly recommend grabbing this opportunity to take control of your story explaining your progress to date and the steps in place to further close the gap. Communicate with your employees promptly don t leave it for them to discover on the Government website, or worse still, through a press headline! Ensure you have a clear process and contact(s) in place for the inevitable questions that will follow. If you re happy with your numbers or initiatives, let the people know! use targeted social media to reach key audiences and influencers. Top tip Businesses should think carefully and strategically about the most appropriate time for their disclosure. If data is good or next steps solid, could you seize the opportunity to take a leadership position? What will late disclosure or disclosure close to the Christmas holidays suggest to observers? Can publication coincide with the launch of a new initiative to further close the gap? *Source: gender-pay-gap.service.gov.uk figures correct at 7
10 Gender pay gap Step 4 Step 4 Take action to further close your gap At this point in time December organisations are well into the 2018 reporting year. On 5 April 2018, each will have to capture their next snapshot gender pay gap data; and hopefully see progress against 2017 s performance! With this in mind, businesses should be exploring and implementing culture and process changes and initiatives to further close the gap with urgency. Key pointers from our panel on how to drive tangible change: Take a systems approach every part of the talent management cycle should be examined, and where necessary, reimagined from recruitment, to assessment and development, to promotion. Tackle proportionality for many, the real issue is an inequality of opportunity rather than pay. Organisations should focus on getting more women, and more diversity in general, into senior and well-paid roles. Empower individuality diversity of thinking, rather than just diversity per se, will help organisations who need to thrive in this rapidly changing world. Focus should be placed on shifting culture away from standardisation and towards individualism to enable creativity and innovation. Enable intelligent working for all businesses must develop better solutions to enable truly flexible or rather intelligent ways of working, and to help ease people back into work. Lead by example for adoption at scale, initiatives and policies must be proudly and loudly championed and endorsed by senior management, as well as visibly adopted. Make some noise and invest in campaigning great new initiatives both internally and externally where appropriate. Live the changes every day policies and initiatives are useless unless they are lived, visibly, and right across the businesses. Enforce accountability targets are important, but only successful when embedded in a meaningful way with visible and consistent consequences for employees at all levels.
11 Gender pay gap Step 4 We have to jar the culture to live the experience. More people [need to] do it and more people [need to] talk about it. Claire Harvey MBE
12 Gender pay gap Step 4 Remember Closing the gender pay gap and other pay gaps is a long-term game. In the immediate future, it may be inefficient and frustrating, but it will be worth it. A 2012 study by the European Commission reported that companies with a gender-diverse Board perform significantly better than their competition. This includes a 42% higher return in sales, 66% greater return on invested capital, and 53% higher return on equity (European Commission, Women in Economic Decision Making in the EU: Progress Report). Watch video Or scan this QR code with a smartphone to watch the video in a browser.
13 Gender pay gap Step 4 We ve got to get over this idea that somehow or other children is a women s issue. It isn t about mothers... It s about parents. It s about people having an experience that everyone is entitled to which is a balance between their work life and their family life. Cherie Blair CBE
Want to know more? If you would like to discuss this topic further or talk to us about how we can help you, please contact us at hello@merchantcantos.com We are an international creative communications agency. We offer expert advice and awardwinning creativity across Brand, Employee Engagement, Investor Communications and Sustainability. Our purpose is simple: to maximise engagement with the audiences that matter most to our clients. How? By making the complex clear, the corporate creative, and the message compelling. London Berlin Dubai Hong Kong New York San Francisco www.merchantcantos.com in