Employers taking action on gender pay

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Pressure to ensure fair pay in the workplace is spurring employers to action, according to research from Willis Towers Watson

Its survey found that gender pay equality is becoming a more important factor for three in five UK employers (58%) when making individual base pay decisions. It also found that half of UK employers (51%) have recently checked their pay arrangements to ensure they are meeting equal pay obligations, and almost a third (29%) are planning to do so.

Almost eight in 10 companies (78%) were found to have had a gender pay gap in favour of men when figures were released in April.

Market competitiveness remains the main consideration for both UK and global employers in setting base pay, the research stated.

It revealed that employers are taking action to promote gender equality. Nine out of 10 (93%) said that they have either already taken steps this year or are planning to promote flexible working arrangements, or are considering taking such action over the next three years. Half of respondents (47%) are planning to review their recruitment and promotion processes to reduce the risk of unconscious and conscious bias.

Employers said they are also planning to implement more inclusive cultures. Nearly nine out of 10 (87%) responded that they have either already started this year or are planning to increase their communication of activities to promote such a culture, or are considering taking such action over the next three years.

Hazel Rees, director of the UK executive compensation team at Willis Towers Watson, noted that disclosure requirements over pay extend to issues of corporate governance, showing a need for fairness in general in the workplace.

“The pressure on companies to do more to promote fair pay and diverse talent in the workplace is not going to go away," she said. "The new disclosure requirements on CEO pay ratios will reflect another dimension of fairness in the workplace. Likewise, the predicted changes to the UK Governance Code will stress the importance of a diverse pipeline into senior roles and give employees a greater voice.”

However, global executive compensation practice leader at Willis Towers Watson Mark Reid told HR magazine that gender pay reporting and executive pay reporting have produced different effects.

“Looking at gender pay has been an enlightening experience for a lot of companies. However, if we’re looking at forced disclosure with executive pay it’s had the opposite effect. A lot of executives have the power to simply negotiate over pay in light of the findings," he said.

Reid added that employers wanting to tackle their gender pay gap should first analyse their data, then look to the recruitment process.

“Check that this really is an equal pay problem in regard to gender, and not a pay issue across the workforce. It’s also important to look at all of your talent processes; so career opportunities for mothers, recruitment, promotions, succession, and talent management,” he said.

“Looking at fair talent progression should be a must for HR. There have rightly been lots of questions being asked about the number of women on boards, but employers should look at the talent pipeline and work from the bottom up as well. Both areas need to be addressed to create long-term sustainable change.”

The 2018 Getting Compensation Right Survey was conducted in April 2018. A total of 1,949 employers worldwide, including 79 UK employers, participated. These UK respondents collectively employ more than 900,000 people.

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