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Gender Pay and the calculus of inequality

Posted on 20 Nov 15 by Carol Merriman

Recently we were privileged to have Duncan Brown, from the IES, speak at one of our Curo Coffee & Comp events.  The theme was Equal Pay reporting and his talk was entitled : Addressing Unequal Pay : Opening Pandora’s Box. There is no doubt that when the lid is lifted off the jar many evils will fly out, but it is also true that hope will be left. There will be far reaching consequences but will they necessarily be detrimental?

We are collectively one consultation deep and there is potentially only one more that will follow.  After that we will all be expected to start preparing for compliance with gender related pay reporting requirements. There is clearly a timely challenge in obtaining the level of detail required to undertake the task and this is particularly difficult given that the nature and depth of detail has yet to be clarified.

Once the data has been evaluated it may show that there are legitimate and defendable reasons why there are differentials in compensation.  The quantum of the difference is likely to vary by industry, geography and potentially sector. Equally there will also be variations within an organisation by business unit, level of seniority etc.  However, there is clearly a meaningful delta in the headline data on gender compensation inequality that is fundamentally wrong, and it is one I believe this new legislation absolutely needs to address. Companies need to figure out how they promote a ‘transparency and fairness agenda’ in a way that addresses these legacy inequality issues. 

It’s not about naming and shaming.  It’s about companies establishing internal benchmarks on pay inequality and moving forward year on year to address (over time) the quantum of the challenge and establishing a position in the market where they are seen as a ‘fair and equitable’ employer. This will be the first enforceable legislative reporting requirement in compensation that will affect all organisations and is the most talked about issue in the reward community today.

No doubt over time statistics and ratios will evolve. There will also be various market, sector and peer group comparisons that will be made available.  Market data businesses will also create new commercial opportunities to benchmark gender stats within industries. However, seeing your own data and making it meaningful is the first step to progress towards actionable insight which will be powerful.

However you look at it and, while the detail is missing at this stage, the direction of travel is absolutely clear. The legacy issues are big and need to be addressed, and in doing so, this will benefit both employers and employees.

 

Gerry O’Neill, CEO