Gender Pay Reporting for the HR professional

As I approach my 40th year, I have started to think about the world around me and specifically the world of work and how it has changed in the 20 odd years that I have been engaged in the world of work. If I think right back to my school days and early university days, I remember the phrase ‘the glass ceiling’ being discussed, a lot, and so I decided to write my thesis all about feminism and the glass ceiling. I don’t really remember all of my conclusions, but I can certainly remember some of the reasons why I felt it was so important to consider the role of women in the workplace.

So twenty years on, what has changed? Has anything changed? Well, a lot and not so much is what my gut instinct tells me. We’ve come a long way in terms of defining what equality means, breaking down the specifics if you like. We’ve also come some way in understanding the factors that make it perhaps more challenging for women in the world of work. It’s been widely discussed that the inequality that women experience has a direct impact on their own health, wellbeing, as well as the fact that they often earn less and therefore their future career is shaped by the number of their earnings. The inequality itself can take a number of forms and I’m certain that many women reading this, can think of examples. For anyone who isn’t clear… being overlooked for a promotion or even another job in the department, experiencing conflict in male-oriented workforces, sexual harassment, or differences in pay are just some of them. What we do know is that women in their 20’s are now experiencing pay gaps at an all-time low, but women in their 30s, 40s, 50s, and beyond haven’t seen any significant changes and are still receiving up to 35% less in the workplace.

There has been significant research that suggests that acknowledging, understanding, and looking to improve gender inequality, could increase the UK Economy along by up to 150 billion. Even just identifying the pay gaps and rectifying them could increase it by 80 billion alone, according to a study by PWC in 2015. The government started to address these statistics in 2015 and in April 2017 introduced legislation that required all UK organisations with 250+ employees to have to provide ‘gender pay reporting’. So since 2018, we have seen data emerge across the public, private, and volunteer sectors on the inequalities that can be found and in some cases, additional narrative to understand why this could be the case and what can be done about it. If organisations fail to report on this, the Equality and Human Rights Commission (EHRC) can investigate and take matters further under enforcement.*

Equal Pay vs Gender Pay Gap

It’s important for employers to recognise the differences between equal pay-something which has been illegal since the 1970 Equal Pay Act and gender pay gaps. Equal pay refers to the fact that it is illegal to pay men and women differently for jobs of the same value i.e. A woman should not be paid less than the man who is doing exactly the same job as her.

The gender pay gap is calculated by taking the average (median or mean) of hourly pay and any bonuses paid across an entire organisation. Within organisations, you could then identify specific departments or even locations where there may be gaps.

External and Internal Factors

If you asked the average person walking down the street, what would they most likely say are the reasons for the gender pay gap? The fact that women take maternity leave? Do more women work part-time or reduced hours? Childcare? Age? Research conducted in 2018 by the Office of National Statistics concluded that there are both external and internal factors that contribute to the gaps. External factors included availability of childcare/eldercare, job perception, proportions of male and female apprenticeships, and the age of employees.

Internal factors included the way in which pay and bonuses are decided, organisational structure and reporting promotion selection criteria, flexible working opportunities, and the language of and way in which roles are recruited for.

The way forward

This has most definitely been a whirlwind through the intricacies of gender pay reporting and inequality of pay within the workplace, but if you’ve got this far, you probably want to know what steps you can take to ensure that you make your organisation as far as it can be and equally as HR professionals, how we can play a pivotal role in the future of pay equality.

  • Starting the discussion – First things first, start the conversation about gender pay reporting, understand what it means, what you need to do, and when you should do it. You can then start to think about how you can collate the information, what support you will need internally to do this and once it’s collected, what do you need to do with it.
  • Take an all-inclusive approach – Look at all of your salaried roles, consider all of your bonus payments, review all of your commission structures and even your pension contributions. Make sure that you have strong, fair processes for reviewing all of the above and that all of your managers and colleagues understand why it’s important.
  • Are you representative? – Look across at your competitors, your industry leaders, are you trailing behind or are you a trailblazer when it comes to representation across your workforce i.e. women and men in every sort of role.
  • Make a commitment – Ensure that all of your senior management or leadership are invested in the future and put together a statement of intent. This can help you to understand who you are attracting, retaining, recruiting, and engaging with and will set the right tone for your organisation that equality is important and key to your success.
  • Plan for now and the future – Make a plan and make it part of your strategic objectives, particularly if you discover large gaps in your organisation, when it comes to pay. Even if you are above average or working to a great standard, think about how you can do even better, how can you teach others and lead the way?

So there you have it, gender pay reporting in a nutshell. It’s a subject that I am fascinated by and will continue to do whatever I can to support organisations understand the importance of gender pay gaps and the connection with the future successes. Over the coming weeks, months, and years ahead HR are going to be at the forefront of supporting organisations to get back to work, work flexibly and support the economy as best they can. It’s up to HR professionals to have all the tools that they will need and for me, having this tool in your toolkit will be invaluable.

If you’d like to understand more about gender pay reporting you can do so here:

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Are you worth it? The National Minimum Wage & National Living Wage explained

Over the last week, I’ve noted a couple of local businesses and one national franchise that was advertising for opportunities to join their organisations and confirmed a salary of between two figures. In each of these cases, the salaries advertised were beneath the National Minimum Wage (NMW) and National Living Wage (NLW) for individuals aged 25 and over and only just fall into the category of 21-24 at the upper end. Now to give them the benefit of the doubt, perhaps they are looking to attract and recruit individuals between the ages of 18-24 and think that this is a way to do that, but it does seem and feel unlikely given the skills required. It got me thinking all about when I started my journey in the working world, what we are really “worth” and why it’s important for employers to understand the difference between the NMW and the NLW in 2020.

Let’s start with some of the basics. Well, the NMW is the lowest or minimum level of remuneration (pay) that an individual can receive, from an employer, for the services that they supply them with i.e work. In order to qualify for NMW individuals must be of school leaving age (which in England is 16* or 18). The NMW applies to any individuals of working age. The government divides the NMW into bands 25 & over, 21-24, 18-20, Under 18 and Apprentices. At the time of writing (February 2020) the NMW rates are £8.21 for 25 & over; £7.71 for 21-24; £6.15 for 18 to 20; £4.35 for under 18’s and £3.90 for Apprentices.

I’m often asked if there are any exceptions for when an employer has to offer the NMW to their employees and like all legislation, there are of course some exceptions but very few. Instead, I like to encourage employers to think about who “is” included and who is worth receiving the NMW. These include all part-timers, casual labourers, agency workers, homeworkers, apprentices, employees on probation, trainees, agricultural workers and foreign workers or offshore workers. The most common exceptions are self-employed people, company directors, volunteers, some government programmes, family members of the employer living in their home, higher education students on work placements or gap years or jobcentre plus work trial programmes. There are others but they are fairly specific to certain industries. I always encourage employers that if they wish to consider making payment to individuals that fall outside of the NMW scheme e.g placement or work experience then it’s always nice to do, but not essential.

Now back at the beginning, I mentioned the National Living Wage (NLW) and I wanted to clarify the difference. The

NLW is only applicable presently to individuals aged 25 and over, anyone under that age still falls under the NMW regulations. The NLW was a term coined in 2016 by the conservative government as a way by which to address living costs in the UK. The NMW & the NLW are the same for anyone aged over 25, £8.21 as of April 2019. This is soon due to increase by a fairly substantial 51p to £8.72 in April 2020. NMW rates will also increase. The Living Wage Foundation is a fantastic organisation that offers employers the opportunity to accredit themselves as ‘Living Wage Employer’, a similar concept to Investors in People. They support the recognition of employers to pay a “Real Living Wage” of £9.30 across the UK and £10.75 in London for anyone over the age of 18. They have done substantial research into the real living cost of living in the UK and feel that this is a fairer value to pay employees. In the South East alone there are over 550 employers signed up for their Living Wage badge. Local examples include Nestle, Oxfam, Santander UK, RSA Insurance, Merstham Community Foundation Trust, Home Instead, Air Ambulance, St Marks Church Reigate and Kingston Smith LLP. Wouldn’t it be wonderful if more employers could sign up for the Living Foundation?!

Before I finish, I wanted to add context for why we have these minimum levels of wage and how fundamentally important they are, I believe, to the DNA of our working culture. At university, I studied social sciences and we learnt a lot about the working movement. At the turn of the 20th century, Lloyd George, the prime minister at the time introduced ‘trade wages’ in four industrial sectors, chain-making, dressmaking, paper making and lace making. By the 1920s further governments had added the coal, agricultural and other factory industries to the list, with now almost 2 million people being treated to a fair wage. The world changed during the ’20s, ’30s, ’40s and it wasn’t until the 1950s and 1960s that more employers started to embrace the trade wages and factory conditions etc. In the 1980’s we saw a change again to our working culture, the Thatcher years, conservatism and a rise in entrepreneurship meant that there was less attention on the NMW. Finally, this changed when in 1998 the Labour Government announced that in 1999 the National Minimum Wage would be introduced. I remember the change so well.

In 1997 I started my first job at the Co-op (in the furnishings department) and my starting wage was £1.68 (I was almost 16). When I turned 16, it was meant to increase to £2.64 an hour. My 16th birthday came and went and I received no such increment. I asked my line manager and she just shrugged her shoulders and told me to go to the finance department. Back then, the finance department consisted of about 10 ladies in their 50’s and 60’s who sat at typewriters on the 2nd floor. I ventured up there, explained what had happened and waited. They smiled, shook their heads and said “Mr M would have to authorise that, he’s the store manager”. Disappointed I returned home and told my Dad. My Dad worked in HR and was fairly senior, so he encouraged me to write a letter and deliver it, in person. So, I did. I outlined how fair it was to receive the same as my male and female co-workers, what had been promised to me at the interview and that it should be backdated to my 16th birthday. The following Saturday I took my letter, I gave it to his secretary and she popped it into his in-tray. Sometime later on in my shift, my manager marched over and said “Mr M wants to see you at 6 pm”. I went to see him, he invited me in and said to sit down. This man in his 60s, who everyone said was scary, looked gentle, kind and asked me to explain my letter. I did and he simply said, I’ll look into it and smiled.

Three weeks later, on payday, in my brown envelope (yes no BACS back then!) I received a little over £100 extra (three months backdated pay) and a handwritten note which just said “You were right, there was an oversight”. I’ve never forgotten. I’ve never stood down ever since when it comes to making my case over a fair wage discrepancy and I encourage everyone I ever hear a case of “it feels unfair” say, to do just the same, know your worth, be counted, know your rights, and fight for that fairness.

For more information on the Living Wage foundation visit www.livingworkfoundation.org.uk

For more information on how to support a fair discussion with your employer, contact me directly.

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