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Blog : BOARD TALK

Understanding Data Alert On UK Gender Pay Reporting

Posted on April 25, 2016 at 12:55 PM

It's Monday, it's freezing, and we can't stop talking about the UK weather. So let's talk about the semblance of fog in boardrooms when it comes to the use of data.


First up this morning was my piece on Forbes on European CFOS, their understanding of 'margins' and their use of data in pricing. The UK, by the way, is the most clueless according to this research. There's even an infographic to make it clear.



Now there's some news from Willis Towers Watson. Its survey reveals that most (91%) of UK companies surveyed feel prepared for the new Gender Pay Gap reporting regulations due to come into force in 2017.


However,it says, although 81% of companies feel they have the tools required to calculate their gender pay gap, only a third (35%) currently have all the data they will need to run their reports. (my emphasis)


 

Just under two thirds (63%) of companies have already taken action to prepare for the new reporting legislation, but just 16% have needed to change their reward programmes. Less than a third (29%) have recently run an equal-pay audit, but more than three quarters (77%) are planning to run one in the next year.


 

“The survey shows the first challenge for most employers will be accessing the data they need to run the required reports. For most companies, base pay figures are easy to access and analyse, but to comply with the legislation the same will need to be true of total pay data, the various components of which are often scattered across multiple systems. Total pay includes bonus, sales commissions, maternity pay, and car allowances to name just a few components, so for some companies gathering this information will be quite a challenge" said Tom Hellier, GB Practice Lead, Rewards at WTW.


 

Apparently the majority of companies have well documented policies on setting base pay (77%) and performance management (94%) as well as work life balance (68%) (all of which are seen as key to reducing the gender-pay gap).


However, the percentage of companies with robust policies on promotion (44%), job moves (35%), monitoring gender-pay levels (35%) and targets for recruitment and retention of women (15%) are lower. (my emphasis)



Offering to show cllients how to understand and use data better is behind many a marketing survey by consultancies at the moment - unsurprisingly, as businesses seem to need all the help they can get.


 

But Mr Hellier also makes a good point:  “The reporting requirement helps nudge companies in a direction that many were already moving towards. However, it is important to acknowledge that gender pay gaps are not just the result of pay decisions and design. They are just as likely to be indicative of culture, talent management and diversity issues.


Elements such as recruitment and succession planning need consideration to understand any unconscious bias in high potential candidate selection or a gender imbalance for recruitment. This type of potential issue needs addressing in all organisations before we will see a more significant closure of the gender pay gap.” (my emphasis)


And here's an example of 'unconscious bias' - which I have to say I am increasingly prone to call 'reinforced bias', from the other report on data, covered on Forbes. An infographic in the Cranfield School of Management/ Vivando study I did not use there:



When you talk about 'gut feeling' -particularly in a disparaging way - what gender do you use in the image ?


Sigh. We still have a long, long way to go, people.



Categories: Technology, Measurement, Diversity