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Closing The Gender Pay Gap: As Elusive As Ever ?

Posted on June 20, 2016 at 2:30 PM

A lot of noise has been made around closing the gender pay gap in the UK - and here is the government's consultation.

The trouble with this approach, however, has always been that it holds huge potential for absolutely nothing to change, while simultaneously giving the impression that everyone has been very busy trying to bring about said change.

Now a recent survey of 114 organisations by Mercer - which included 21% of the FTSE100 - finds that whilst 73% agree with the notion of gender pay reporting, 38% believe the current proposal will make little or no difference to the national pay gap.

Worse -amongst the 114 companies surveyed, only half deem the Government’s definition of pay as fit for purpose, describing it as complex (40%), illogical (31%) and burdensome (31%). Pretty damning.

“UK companies recognise, that through the new gender pay reporting requirement, the Government has not got the balance right between adding a burden on business and providing meaningful insights,” says Fiona Dunsire, Mercer’s UK CEO.

"This very high level single measure does little to show the way forward for organisations" she adds.

Not only is it not clear how pay is defined in proposed regulations, says Mercer, but the definitions are "quite  alien to how companies actually manage and define pay, bonus, shift pay and other reward programmes.”


The listed companies alone in Mercer's survey represent some 3.8 million employees. But the consultancy says they do not seem to be getting to grips with the detail needed to understand how to tackle any gender pay gap in their organisations. Here's an extraordinary finding: Only 11% of them have undertaken any analysis on the levels of starting pay for men and female performing the same work.


So, what have they been doing ?

According to Mercer’s research, the most prevalent initiatives include analysing the gender pay gap (54%) and creating a diversity and inclusion strategy (54%). Forgive me, but that sounds an awful lot like a strategy to keep some people in work, rather than one for change.

Anyone setting goals for female inclusion? Just 22%. In a world of data and technological advance, anyone analysing labour flow and promotion rates by gender? Just 27%.

Mercer’s research shows that few have investigated the potential drivers behind any pay gaps. Of those that have done some analysis, looking at pay differentials by grade or level is most prevalent (36%).

Just 22% have looked into whether there’s a gender pay gap on their promotion increases. A mere 9% have looked at bonus awards  - one can only assume that's because women don't have jobs that earn bonuses - and as for post-maternity analysis : just 3% have been involved in looking at that.

Mercer's frustration is understandable - the consultancy has produced some very good ideas for change through its When Women Thrive global research initiative.

For me the only impetus for change with any sort of  a cutting edge is the one that has come from the government review of women in finance led by Virgin Money chief executive Jayne-Anne Gadhia.

It found that women make up only 14% of executive committees and struggle to reach the top positions of financial services companies, and to tackle that, it recommends they attach the pay packages of their executive teams to hitting gender balance targets. The Treasury has now launched a charter on how to implement the review recommendations. 

Not for nothing do idioms last through generations: 'put your money where your mouth is' would save a lot of hot air on gender equality on pay.


Categories: Women, Measurement, Pay