Kathryn Nawrockyi, Director, Opportunity Now, blogs on why pay transparency should be an an imperative.
Yesterday (16 December 2014) MPs passed a Ten Minute Rule Bill – a motion allowing MPs to outline their views on a subject or aspect of existing legislation – on making it mandatory for organisations with more than 250 employees to publish their gender pay gap data. The Bill will now go to a second reading in February. This is a hugely positive step forward in the campaign for equal pay.
The gender pay gap currently stands at 19.4 per cent. Yes, this is the lowest ever on record. But we can hardly celebrate the fact that women are only earning 81p for every £1 the man sitting next to them makes – or even less in some areas. That’s why I welcome the call for this Bill, and the forthcoming debate.
“ Whilst we’ve made considerable progress on equal pay, it is still too slow. If we’re going to close the gap we need senior leaders and managers to take action by carrying out pay audits, publishing the data they gather and using it to inform what they do next. ”
Publishing the pay gap data will not only give employers a clear picture of the pay situation within their own organisations, but also focus their attention on the problem and its causes. For example, we know that women are disproportionately concentrated in low-paid jobs, and gathering pay data will help organisations identify if this is the case for them and examine how they can tackle any gaps, whatever level they appear at.
Having concrete data may also help to alter men and women’s differing perceptions of the pay gap. Our Project 28-40 report found that less than half of women thought men and women at the same level earned the same in their organisation, compared to three-quarters of male respondents. In some sectors it was even lower – just 30 per cent of women in the finance sector believed men and women at the same level were paid equally. Publishing pay data could help to alter these perceptions and encourage senior leaders – who are more likely to be male – to take action to reduce the gap.
So how can employers tackle their pay gap? Essentially, it boils down to three steps:
- Carry out transparent pay audits;
- Publish the results of these audits and make them publically available;
- Develop targeted action plans to address any pay inequalities. Even better, publish these too.
A number of our member organisations are already doing great work in this area, including PwC, Genesis Housing Association and our 2014 Opportunity Now Transparency Award winner Friends Life. They are sending out a strong message that they are serious about equality and rewarding staff equally for their work, and I would encourage other employers who are concerned about gender pay gaps to use these strategies.
Whilst we’ve made considerable progress on equal pay, it is still too slow. If we’re going to close the gap we need senior leaders and managers to take action by carrying out pay audits, publishing the data they gather and using it to inform what they do next. But it must not become a box-ticking exercise. Instead the data should be used to inform what steps an employer takes next on pay. This is not about naming and shaming, but about valuing employees’ skills equally – and we can all agree that, in the words of Sarah Champion (the MP who proposed yesterday’s motion) ‘you should be paid for the job you do, not the person you are’.