Gut feel and lack of innovation: the state of strategies to close the gender pay gap
Companies are acting on ‘gut feel’ rather than real evidence when it comes to implementing measures to close the gender pay gap. More collaboration, benchmarking and innovative solutions are needed
Flexible working, development programmes and active succession planning are the most popular approaches to close the gender pay gap, according to research into 100 of the biggest employers in the UK. Meanwhile, external benchmarking, feedback and policy review are the least used strategies to help close the gap.
Regulations requiring big employers to publish data on their gender pay gap came into effect in the UK on 6 April 2017. HR Data Hub, a platform which provides external benchmarking data to HR professionals, has reviewed gender pay gap reports from top UK companies to understand what they have put in place to close the gap. From this it identified 21 of the most frequently used measures and assessed their relative impact on reducing the gender pay gap. These are published in its Gender Pay Gap Research Report.
Here we share 10 takeaways from the report:
1. Flexible working trumps all
Flexible working continues to be the main focus to reduce the gender pay gap, with 56% of companies offering this. It is also the most frequently used measure by companies who have seen the largest decrease in their median hourly gap (80% of such employers)
2. Development and opportunities biggest impact
In terms of effectiveness, the measures focused on preparing women to be successful through development and subsequently providing the right opportunities appear to have the biggest impact on closing the gap
3. Look to the evidence
None of the companies provided evidence-backed rationale as to why they are implementing each of the measures. It appears that companies are acting on ‘gut’ feel or anecdotal evidence from focus groups or the wider business
4. It’s not all about equal pay. Right?
All of the companies reported that their gender pay gap was not caused by equal pay issues but rather a lack of women in senior or STEM related roles. This will never be 100% true due to gender bias. Companies should be conducting annual audits to ensure that process and governance is ensuring pay equity
5. Where’s the innovation?
There does not seem to be a significant amount of innovation in the measures used to close the gap. Most companies use a mix of the top 10 measures identified in this report. Some innovation was noted but nothing revolutionary yet
6. Diversity targets – too ambitious?
The use of diversity targets has had the least positive effect on closing the gender pay gap. Targets are important to signpost the intentions of the company and for the Board to be held to account. But setting the right level of targets is exceptionally difficult because of the lack of internal and external benchmark data. In addition, measures introduced will typically take a significant amount of time to make any meaningful impact on the gender pay gap. Most boards will want to set ambitious targets which are simply not possible
7. Gender-neutral job adverts not delivering change, yet
In terms of getting more women into senior roles the least positive effect is the use of gender-neutral job adverts. This is somewhat surprising in that this should create a more balanced applicant pool. This might be due to the limitations of the data set. The other reason might be that the balanced applicant pool is not translating to increased job offers for women. It is important that the business not only facilities these opportunities but prepares women for the interview process through the right development
8. Returner programmes attract talent
Making sure companies stay connected with women who are on leave, taking a career break or have moved to a new company is an emerging trend. This does take a significant amount of time and investment to maintain but is a great way to attract talent back to the business
9. There is no quick fix
There is no universal and quick way to close the gender pay gap. True parity will take a significant cultural shift at a corporate and society level. Companies can lead the way, but this is no quick fix – it will take decades to see any significant change and even longer in male dominated industries
10. More collaboration please
Companies should consider collaborating as part of a wider industry group. Working together to identify the systemic issues preventing women from entering and progressing within their industry. This will provide the opportunity to share best practice and resources to improve the gender pay gap across the industry.
HR Data Hub is running a webinar on 16 January 2020 on How to Close Your Gender Pay Gap, More information here.