Gender pay reporting – priorities, progress and predictions

By Alastair Woods

As we enter year two of gender pay reporting in the UK, it is clear that the sunlight that the disclosure and media scrutiny have shed is helping to accelerate change.  This has been amplified by the broader themes of equality and fairness in society which means, I think, we are now at a watershed moment. The data that has been reported now represents the baseline against which progress must be made to reduce the gap.

The good news is that many of the reports we have read have focussed less on reasons why the gap exists (e.g occupational segregation) – to what they are doing about it. We think there are two main lines of activity to focus on:

The first priority is to address and improve representation of women at senior levels.  We have seen an uptick in commitments from organisations to achieve certain levels of female representation (which are typically between 25% to 50% of a population or tier). Others are focussing on broader programmes that together should feed into promotion and progression.  These range from gender balanced recruitment shortlists, flexible working, enhanced shared parental leave – and longer-term change around culture and tone from the top. These, considered together as an integrated set of activities are crucial for sustainable change.

The second strand of activity is around pay for comparable roles. One of the criticisms of gender pay reporting is that it does not give enough scrutiny to how similar jobs are paid. Recent press on actors and sports commentators have shed light on this. While there may be justifiable legal reasons or “material factors” that explain differentials, there is a broader question as to whether pay gaps fail the “felt-fair” test within like jobs or across levels within the hierarchy.  This points towards a refocus on the pay and grading infrastructure that underpin pay decisions and enable the transparency that fair pay demands.

So, a few predictions for the next year:

  • A resurgence of job evaluation and specifically “new world” job levelling approaches to ensure that jobs are valued correctly
  • An increase in transparency and disclosure of pay ranges and the process for determining pay positioning
  • Improved communications of the decision-making process of pay positioning, pay increases, and the rationale for a starting salary or a pay adjustment.
  • Greater effort to ensure pay ranges are market-tested and potentially a shift to narrower ranges that help reduce gaps
  • Greater use of red and green circling to slow down or accelerate movement
  • An increase in the use of data analytics to understand patterns and risk areas, and engage the business in the process.

There are grounds to be positive. I have a 4 year old daughter and from an equality perspective, I feel optimistic that she will enter a workplace where she can take equal pay for granted.

Alastair Woods