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On 2017’s International Women’s Day, Iceland made waves by announcing that from January 1, 2018, it would be illegal to pay women any less than men. As the first country in the world to do so, they set a new standard for addressing the gender pay gap, with the aim of completely eradicating it by 2022.
Despite having an equal pay act in their national legislation since 1961, until very recently, there were no repercussions for Icelandic businesses who chose to pay women less. The new law means that any public or private company that employs more than 25 people needs to be independently certified as paying equal wages for work of equal value. If they can’t prove this, they will be fined daily until they do.
This initiative, coupled with the requirement that companies with over 50 employees should have boards with 40% women, has reiterated the country’s position as the best in the world for gender equality. It’s a title they’ve held for the last ten years.
The UK gender pay gap
While unequal pay is technically illegal in the UK, there are no repercussions for those who wish to ignore it. In April 2017, MP Justine Greening declared that from April 2018, gender pay gap reporting would be mandatory for businesses with over 250 employees. They are now legally required to publish the following figures on their own website, and a government website:
- Gender pay gap (mean and median averages)
- Gender bonus gap (mean and median averages)
- Proportion of men and women receiving bonuses
- Proportion of men and women in each quartile of the organisation’s pay structure
By increasing transparency, the aim is to place a spotlight on the factors that contribute to the gap and encourage businesses to take tangible action.
According to the ONS, as of October 2019, the gender pay gap among full-time employees was 8.9%, and displayed very little progress since the previous year. The Fawcett Society, the UK’s leading charity campaigning for gender equality and women’s rights, reported that even though it has been 50 years since the 1970 Equal Pay act, four in 10 women aren’t even aware they have the right to ask for equal pay for equal work.
While this challenge is by no means new, it has experienced a renaissance of sorts over the last 10 years, gripping society’s imagination as reports shifted from the business pages to the front pages of newspapers. Independent research, such as the Hampton-Alexander review, has endeavoured to increase the number of women on FTSE boards and improve representation in senior leadership, while corporate campaigns such as The 30% Club are working towards 30% female representation on boards and in management levels, world-wide.
The gains could be extremely beneficial economically, with PWC’s 2019 Women in Work Index reporting that closing the gender pay gap in the UK could increase earnings for women by £92 billion. So, what should employers consider when looking to close the gender gap within their own business?
Bonuses, not base
Pavita Cooper is a leading talent and diversity expert and Steering Committee Member of The 30% Club. She notes the complexity of the pay gap lies beyond the base salary: “The bigger gap we see, particularly in financial services, is the bonus, because it’s more subjective and allows for unconscious bias,” she explains.
“You hear bias in people’s conversations. It’s quite loaded – ‘here’s a family man with three kids and here’s a young single woman’. When bonuses are being handed out, those decisions filter into people’s thinking and decision-making.”
What’s more, in the bonus discussions, men are more likely to negotiate, meaning they will walk away with bigger numbers: “Most young girls get less pocket money than their brothers, so girls don’t learn to negotiate,” explains Pavita.
“Many women will say ‘I feel uncomfortable about pay, I trust my boss will do the right thing’, whereas men won’t do that, they’ll go into a bonus meeting with a number in their head that they’ve already discussed with their boss,” she continues.
“Women will often find out in the room when the envelope is handed over.”
Addressing talent shortages
For Bal Gill, UK Lead for Active Inclusion at Capgemini, and Laura Gardner, a member of Capgemini’s UK’s Active Inclusion team, the challenge remains in creating a pipeline for senior roles.
“Our gender pay gap is caused by having fewer women in senior grades and highly paid technical roles, rather than pay for equal or similar work, so we are working on improving this through a focus on the talent pipeline,” says Bal.
“We have focused on ensuring our development programmes have a diverse range of candidates and take gender into consideration when succession planning for all key leadership roles. We have rolled out inclusion education for our vice presidents, hiring managers, recruitment and HR teams and showcased our female role models internally and externally,” Laura adds.
As one of the biggest global consulting and technology services companies in the world, it’s not just the senior roles Capgemini are conscious of. In 2015, the company announced a new target – increasing the proportion of female graduates and apprentice hires to 40% by 2017. They achieved this target by adapting their recruitment approach:
“We revised our recruitment processes, training our hiring managers and recruitment teams in unconscious bias, and ensuring gender-diverse assessment panels,” says Bal.
“We also made several changes designed to attract and recruit from different talent pools, especially women who may not have thought of a career in technology.”
The role of recruitment
The role of the hiring manager in achieving equity has not been lost on Pavita: “Language is really important. When a line manager is briefing on a job, using words like ‘he/she’, being gender neutral and not using loaded skillsets is ideal,” she explains.
In the context of support staff recruitment, where the complication lies in encouraging more men to embrace an EA or PA position, language is also a huge barrier to attracting the right talent.
“When you talk to people describing PAs, they say ‘someone who is going to look after me’, but that’s very nurturing language, it sounds like you’re talking about their mother. Whereas if you talk about someone who has outstanding organisation skills, who is fast, has an attention to detail and can think ahead, then you start to think ‘who do I know who could do that?’, not ‘which woman do I know who could do that?’” says Pavita.
For Bal and Laura, it’s essential that every part of the recruitment process encourages diversity: “Recruitment is a key factor – it’s absolutely critical to attract diverse talent. We have refreshed our processes to ensure an inclusive approach to hiring, and our recruitment suppliers signed a Diversity & Inclusion charter to ensure we are provided with diverse candidates,” explains Laura.
“We also introduced Return@Capgemini, a ‘returnships’ programme that supports women to return to work after longer-term career breaks. With over 90 potential candidates at the launch event, followed by 150 applications within two weeks, we are on track to achieve our target of hiring 30 Returners in 2018,” she continues.
Looking at the bigger picture
The Capgemini team is also looking beyond the immediate hire to long-term solutions: “The continuing war for talent is our biggest challenge. We’re investing in our schools and universities outreach programme to excite young women about technology, but this is a long-term project and a sustained commitment,” says Bal. This holistic approach has also resulted in ongoing success for The 30% Club: “We looked at multiple perspectives from which we could make change happen, so we talked to the media about how they cover women and we worked with universities to look at the pipeline,” explains Pavita.
“We also started cross-company mentoring – we know women need support from senior leaders, but having someone in their own organisation isn’t necessarily helpful. But if you give them exposure to a senior person from another industry, it can really accelerate their learning and that worked really well.”
For businesses that have reported a gap, Bal and Laura suggest approaching it with an open mind: “Take the time to understand your gap, don’t be afraid of the subject. Once you know the gap, you know the size of the challenge, can understand the reasons why and can put an action plan in place to close it,” advises Bal.
Pavita suggests a similar approach: “Businesses need to establish a narrative, both internally and externally, about what’s happening, why it’s emerged and what they’re doing about it.”
“For example, if it’s because there are no women at senior levels, what is the business doing about that? How are they looking at flexible working policies? How are they looking at retaining women post-career breaks? If women are dropping off really early into entry-level roles, if they’re not even getting to middle management, why is that?” she queries.
While organisations must ask the right questions as a first step, Pavita concludes: “I don’t think it matters how big the pay gap is – the issue now is what companies do about it. How organisations regroup, respond, refocus and take action, that’s what really matters.”
It’s not just companies who should be implementing these policies – the government also has a role to play. While closing the gap is already a policy focus, attention should be directed to improving the support systems for families to help women stay in or return to work. Proactive measures such as tackling workplace harassment and discrimination are also essential in making workplaces welcoming and encouraging career progression.
For more information, Read our guide on improving diversity and inclusion in the workplace.