Equal Pay? Not Really !








Blog by Laura Cooney, Communications Officer, Opportunity Now and Race for Opportunity

Today is Equal Pay Day – the point in the year where, statistically, women are working for free until the end of the year due to pay inequality. It’s also a day where I’m struck with a sense of déjà vu. Didn’t we have this conversation last year? And the year before that? Fair reward and recognition for all is a key campaign of Opportunity Now, but hearing the same messages over and over again is starting to sound like a stuck record.

We know that the pay gap is slowly narrowing; it’s gone from 17.4% in 1997 to 10.2% in 2010. We know that part-time workers earn an average of £8.00 an hour compared to £12.56 for full-time workers, and that this disproportionately affects women –women are three times more likely to be working part-time than men[i]. We know that women only make up 19 per cent of FTSE 100 management posts. We know that there are three times as more young women in low-paid, low-skilled jobs than there were 20 years ago. We know all these things. And we know what companies should do to tackle it.

So, what practical things can business actually do? Well, first off we recommend carrying out an Equal Pay Audit, to undertake analysis to work out if you may be paying unequal wages for equal work. The Equality and Human Rights Commission has a comprehensive set of guidance on how to undertake an Equal Pay Audit.  This toolkit also helps you to devise an action plan to deal with any issues identified in the Audit. Best Practice from Opportunity Now companies indicates that an Equal Pay Audit is more likely to be successful if a named manager is appointed to oversee the review and follow-up process.

Many of the articles published today are asking for employers to come forward – to be transparent about what they pay their staff and to show the work they’re doing to narrow the pay gap within their own organisations. Later this month Opportunity Now and Race for Opportunity will be publishing our 2013 Benchmarking Report, which analyses data submitted by our member companies to assess how well they’re performing on gender and racial diversity, equality and inclusion in their workplaces. Consistent with last year’s findings, it indicates a link between more women at senior levels and organisations more likely to carry out an equal pay audit. 

However, this isn’t just about equal salaries for equal work, men earn around £150,000 more in bonuses in their lifetimes. Responsible businesses need to do more than rely on an assumption of a meritocracy by actively ensuring they test their reward and recognition processes to prove they are unbiased. There is a clear business rationale for making the most of all available talent and ensuring it is being fairly recognised and rewarded.

How can they do this? Through unconscious bias training – our Benchmark Trends report last year showed this had an impact on recruitment of women when all staff involved in recruitment had received this training, now businesses need to extend this training to those involved in promotions, starting salaries, reward teams, and managers that allocate bonuses. Gender needs to be monitored at all of these points as well.

Transparent pay structures make it more likely that any issues will be visible and can be challenged and dealt with. Employers need to encourage a culture where employees are able to be open about their pay, including any performance related pay awards. Our Transparency Award case studies gives examples of how businesses have publicized their data and information on gender in line with Think, Act, Report initiative. (Still time to enter for this and the Times Top 50)

Finally, we may be bored of hearing about the gender pay gap, but sadly it’s not going away anytime soon because it is a complex issue with many components to address – see our Q&A with Equal Pay expert Sheila Wild to begin to understand and address this issue to the benefit of your business by rewarding and thus, retaining all of your talent.