Firms will be named and shamed for metrics they can do little to control, says expert panel
Rules that will require businesses to report on their gender pay gap are ‘exclusively unhelpful’ and may actually set back the cause of gender equality at work by encouraging a focus on the wrong metrics, according to a panel of HR experts.
Companies with 250 or more employees are already being required to undertake pay audits and will publish figures on the gender pay gap in both base salary and bonuses from 2018.
But at a London HR Connection event this week, reward experts said that, however well-intentioned the legislation, mandatory reporting would mostly lead to confusion and would fail to address underlying issues.
Janet Walsh, professor of human resource management and employment relations at King’s College London, was particularly scathing of the idea of ‘league tables’ that would rank organisations by sector. “There is confusion over what we even mean by gender pay,” she said. “People regularly state that women in the UK earn 20 per cent less than men, but they’re not talking about women doing the same job at the same grade.”
Professor Walsh pointed out that while Deloitte had reported a gender pay gap of 17.8 per cent, when employees at the same grade were compared, this shrank to around 1.5 per cent. In the academic world, when seniority, experience and productivity were accounted for, there was virtually no difference between the sexes, she said.
This matters, Walsh added, because the use of legal tables is considered punitive: “The government is talking about [introducing] a capacity to name and shame employers. We need to know what we’re actually naming and shaming them for.”
Chris Charman, senior principal at reward consultants Mercer, who specialises in equal pay, said: “Most of the gender pay gap is caused by a lack of progression, the nature of the work women do, talent flows and – critically – unconscious bias.”
Looking at metrics, he said, did not help address these underlying problems and would lead people to draw the wrong conclusions about which businesses were successfully addressing gender issues at work.
This meant the focus on pay was “almost exclusively unhelpful”, added Charman. “It runs the risk of being a compliance-driven exercise… This type of metric is very detached from how organisations operate reward. Reward professionals are effectively being handed a challenge they can’t solve.”
Cy Murray, global head of reward and HR policy at Apollo Tyres, said she had begun preparing for reporting requirements, but did not find the results particularly inspiring. “It didn’t tell me anything I didn’t know,” she said. “Of course I’m paying males more than females, but the devil is in the detail.” It was pointless to compare people across different functions, she added, and she believed that, despite the existence of a numerical gap, the business treated people equally.
Part of the answer to making meaningful progress on gender equality, Murray continued, was a return to rigorous processes, and particularly a focus on job evaluations: “These have fallen out of favour in the UK, and I’m really disappointed by that. I’m encouraging employees and managers to sit down and [scope out] realistic roles – have adult-to-adult conversations about performance. It levels the playing field for everyone.”
Walsh suggested it would be more meaningful to look at the pay gap between women who work part time and full time, which she said was the cause of broader gender pay differences. “The government is almost silent on this issue,” she said.
“Perhaps for full-time women, the emphasis should be as much on trying to achieve genuine flexibility and work-life balance as it is on pay.”