Gender pay reporting legislation requires employers with 250 or more employees to publish statutory calculations every year showing how large the pay gap is between their male and female employees.
The employer must publish six calculations showing their:
- average gender pay gap as a mean average
- average gender pay gap as a median average
- average bonus gender pay gap as a mean average
- average bonus gender pay gap as a median average
- proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
- proportion of males and females when divided into four groups ordered from lowest to highest pay.
The causes of the gender pay gap are complicated and often overlapping, these are some factors you should look at:
High pay sectors are male-dominated
Women tend to end up concentrated in employment sectors that offer narrower scope for financial reward whilst many of the highest paying sectors are disproportionately staffed by male employees.
The effects of part-time work
Part-timers build up less in terms of experience and there are negative effects on wages from working part-time or of taking time out of the labor market to care for family.
Unconscious stereotyping, where there are assumptions about women not wanting to take promotions, or not being able to do so, particularly if they have caring responsibilities. Women make up 47% of the workforce, but only 35% of managers, directors and senior officials.
What’s to be done?
If you have a lot of women in part-time roles perhaps offering flexible working arrangements or remote work opportunities could help these staff manage their careers to better advantage. The gender pay gap widens after women have children and this could be reduced if men and women are enabled to share childcare – shared parental leave and pay affords working parents the opportunity to share up to 50 weeks of leave and up to 37 weeks of pay in their child’s first year.
Can you help more women to promotions with training and development opportunities, perhaps using mentoring or coaching to encourage them to seek more senior roles? The Guardian reports when an organization achieves better representation at the top, the median gender pay gap shrinks relative to the composition of the company as a whole.
Since the aim of the legislation is to encourage transparency, take the opportunity to explore the underlying causes of any disparity and take steps to close the gap. Transparency involves being open about processes, policies and your criteria for decision-making. It is also important that your managers understand that their decisions must be objective and evidence-based because those decisions can be reviewed by others. Introducing transparency to promotion, pay and reward processes can reduce pay inequalities.
Advising your staff about the salary banding system should help, since many women are reluctant to negotiate their pay so if you clearly communicate the salary range available for a role it should encourage women to negotiate their salary. There is some evidence that women underestimate their abilities and are more conservative in assessment of their abilities than men are, mentoring and coaching or sponsorship by a senior manager may help in this situation.
At 10Eighty we think that when employees believe they are fairly rewarded, they are more likely to put in a discretionary effort and collaborate with their co-workers. This enhanced commitment can lead to better job performance, whereas when employees believe they are underpaid, they are more likely to seek a new role; and this costs organizations money and valuable institutional knowledge.