Please mind the (gender pay) gap!

BY Chris Clarke

In recent months, there has been a groundswell of grassroots activism that is helping women unburden themselves from the shackles of being treated as secondary to men.

In business, the lack of women in positions of leadership has been a talking point for years. Even with the UK’s second female Prime Minister currently in office, seeing women in positions of power is almost a novelty and at Board-level can sometimes be seen as nothing more than a box-ticking exercise.

In a former life, I’ve even been part of conversations that talk about how a company might be able to make it less obvious that most of their senior management team is male, or how they might include a secondary tier of management to paint themselves in a better light. “It’s about the optics” is an all too common attitude.

The fact of the matter is that, for too long, the value of women in business has not been acknowledged. They still fall prey to unfavourable gender stereotypes and in every walk of life they are rewarded less for their efforts in carrying out the same or similar tasks as a male counterpart (‘equal pay’). However, the debate about gender pay has now extended to address something more pressing – the gender pay gap. This is the difference in average pay between all men and women in a workforce.

Now, this conversation isn’t about female empowerment. And this blog is certainly not intended as an essay about feminism and how to shatter the glass ceiling. However, it is here to serve as a reminder that, as society and government increasingly look to eliminate pay disparity between men and women, companies are legally obliged to stand up and take notice.

Since 6 April 2017, all companies with more than 250 employees have been required to disclose six metrics that help calculate the gender pay gap across their business on the ‘snapshot date’ [1]. An implementation period was provided for companies who may not have the data readily available, but the deadline is now fast approaching and all companies that are considered ‘relevant employers’ must publish their metrics on their public-facing websites and the Government’s website [2] no later than 4 April 2018 – 12 months since the snapshot date. In addition to the data, companies must also provide narrative to explain why there may be disparities and what they intend to do to rectify and close the pay gap. Both the figures and narrative must be signed off by an ‘appropriate person’, most likely to be the CEO.

Whilst it is undoubtedly important, in its own right, that the gender pay gap conversation is held, companies now also face added risks once they publish this information. For example, they are liable to be sued for back pay in class action suits (as the current case brought against Tesco shows), or receive negative publicity that harms their recruitment prospects and damage to their reputation with customers and suppliers.

In a world that’s constantly driving towards ever greater transparency, it is more important than ever that organisations are honest about the challenges they face, but also demonstrate their proactive efforts to close the gap. Only by doing so will they foster a sense of value and loyalty from their employees, and demonstrate to investors and other stakeholders that they are ready to tackle difficult challenges that, in the long term, will continue to generate value for all involved.

[1] The snapshot date is the specific reference date in which the Gender Pay Gap needs to be calculated. For businesses and charities this date is 5 April.

[2] www.gov.uk/report-gender-pay-gap-data