Getting tough on workplace gender equality: from small nudges to big pushes?

Despite some challenges and opposition, the UK government is pressing ahead with its legislation-led agenda around inclusion. Following gender pay gap reporting, the scope of rights around flexible work and parental leave could increase with the announcement of a new review. Ethnicity pay gap reporting could also be on the horizon.

Autumn 2019 issue of Relocate magazine
This article is taken from the latest issue of Relocate magazine 
– the must-read for HR, global managers and relocation professionals."Business as usual just won't cut it" These are the words of former Prime Minister for Women and Equalities, Penny Mordaunt, announcing one of the Theresa May government's final initiatives to try “tear down the ingrained and systemic barriers” to opportunity women face when it comes to equal pay, progression and equality.Launching in July, the Government Equalities Office’s (GEO) Women’s Empowerment Roadmap included a review and call for employers to consider how they can be more flexible and transparent in their parental leave and pay policies.“I want to see every organisation thinking about designing and offering their jobs as flexible by default; enhancing their shared parental leave and pay offers to the same extent as their maternity leave offers; and doing what they can to provide a supportive environment to those returning from parental leave,” said Ms Mordaunt of the wide-ranging proposals under review.

Nudging employers into action

Ms Mordaunt’s call on employers to be part of a “bigger step change to support women and men balance work with care” came with further announcements. The government is set to review how equal pay legislation is enforced. It is also launching a national campaign alongside this to raise awareness among employers around how they can advance gender equality in the workplace.Further signalling the government’s sustained focus and intent on inclusion and diversity, Ms Mordaunt added that the new GEO will join forces with the Disability Unit and Race Disparity Unit.These bold ambitions are framed by the most recent set of gender pay reporting data. Figures for 2018-19 filed by the UK’s 10,000 largest firms covered by current legislation show more private-sector employers saw their gap worsen (3,387) or stay the same (645) than improve (3,736). Similarly, for public sector organisations, 703 saw the gap improve, 658 saw it worsen and there was no movement for 90 employers. Within this, some companies also saw their gap increase, despite the reporting requirement.Following the publication of these headline gender pay gap figures in April, Sam Smethers, chief executive at equality campaigners the Fawcett Society said they were “disappointing, but not surprising”, adding the current pay reporting regulations are “not tough enough.”

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Linking parental-leave policies to gender pay

As well as nuances within individual companies – including for some an increase in bonus and median pay gaps – the overall gender pay gap’s direction and speed of change are important at both a company and societal level.Evidence shows companies with smaller pay gaps are more profitable. Companies in the top 25% for executive team gender diversity are 21% more likely to experience above-average profitability than companies in the bottom quartile. Inequalities also weigh on economic growth and national well-being.Presaging Ms Mordaunt’s announcement about the new consultation, the Fawcett Society in April called on employers to set out a five-year strategy for how they will close their gender pay gaps, monitor progress and results. The campaigning body is also pushing policymakers to require employers to publish action plans so they can be held accountable, including “meaningful sanctions” for those who do not comply.“In some cases, employers will have a wider gap because they have taken on new female junior staff to build their pipeline,” said Ms Smethers. “But unless they can demonstrate that, it is more likely that they’ve failed to make changes.”

Is legislation alone enough to move the dial?

However, the outcomes favoured by the GEO and bodies like the Fawcett Society in the current consultation – default flexible working and a tighter approach to gender pay gap reporting – could meet with opposition, despite their positive intent.Two years in, gender pay gap reporting continues to attract criticism from employers. A fifth (21%) of respondents to an MHR Analytics Twitter poll reported that their company struggled to file the mandatory report this year before the 4 April 2019 deadline. A further 38% are still also unclear about their organisation’s gender pay gap reporting.These insights underline wider concerns around current reporting arrangements. Laura Timms, product strategy manager at MHR Analytics, is among those warning of the danger gender pay gap reporting will fail as a tool for progress and positive change, “This gender pay gap reporting legislation can be a significant drain on time and resources, particularly when added to all the other compliance obligations for HR, payroll and finance teams.”Another practical concern is that data doesn’t provide enough meaningful insight for women to challenge unequal pay or companies to act on the information pay reporting yields. “Narrowing this gap to meet government targets will require proper data analysis,” said Ms Timms. “Employers will need to assess the complex underlying factors behind their pay gaps and make evidence-based plans to address them.”Without this traction, the lack of know-how and the resourcing challenges organisations report, it’s easy to see why gender pay gap reporting on its own isn’t regarded as an effective or long-term solution to resolving ingrained norms like maternity and paternity leave that play into the gender pay gap.

What can organisations do to prepare for more meaningful reporting?

The Fawcett Society is among those calling on the government to get tough and require employers to publish action plans against which they can be held accountable and with “meaningful sanctions” for those who do not comply.With the possibility of ethnicity pay gap reporting on the horizon – consultation on which closed earlier this year and the government is currently considering the evidence – and the wider amendments proposed around parental leave and flexible working in the current consultation, there is a real need for practical information around how to bridge the gap.For the moment at least, the government is only suggesting companies filing their gender pay gaps add a supporting narrative; a document that can help readers understand why the gap exists and plans to address it.Publicising pay gaps alongside a supportive narrative and strategies to tackle the causes are critical to changing the narrative around reporting and something policymakers recognise in the advice it gives. The Government Equalities Office (GEO) says, “By publishing a plan with targets and clear actions, you will be sending a strong signal about your commitment to gender equality in the workplace.”The GEO, in partnership with its Behavioural Insights Team (BIT), has already published evidence-based, best practice guidance on the action employers can include in their plans to reduce the gender pay gap. The newly launched Empowerment Roadmap should also support this by helping employers and employees understand what the challenges are and how they can be addressed.

Getting with the programme

Within this, mobility is well placed to ensure plans, goals and pay is monitored as part of an organisation’s wider commitment. This could include collecting data on the uptake of certain package elements, its values and around making sure packages are comparable, transparent and appropriate.It also means working closely with HR and talent teams to ensure “that when you look for staff to be sent on global mobility assignments you don’t always pick the same people to go forward,” author, government adviser and CIPD Fellow Teresa Boughey told delegates at Relocate’s Festival of Global People this year.“It is about broadening your scope and ensuring those opportunities aren’t narrowed because of someone’s race, gender or personal situation. I think it is absolutely vital not to make assumptions that people don’t want to be included.”With this summer’s announcements and reviews, it looks like employers can expect more – not less – focus on inclusion and diversity, gender and now possibly race pay gaps, with the Ethnicity Pay Reporting consultation due to report after the end of the consultation period in January 2020. This important issue is not going to go away until we all take action.Subscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory©2019. This article first appeared in the Autumn 2019 edition of Relocate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.

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