The effects of the new gender pay reporting legislation due next week will be staggering and long-lasting, believes Oliver Shaw, CEO of Cascade HR. In fact, the degree of exploitation that the law could uncover, may well be as profound in impact as the #MeToo movement that rocked the workplace in late 2017. Here, he elaborates on his thoughts in this exclusive interview with HR Review…
As an industry, there has been plenty of time to prepare for the introduction of the new gender pay reporting legislation. In fact, organisations with 250 or more employees have had 12 months to make the necessary calculations and – in many cases – develop the narrative that they will use to annotate the gaps in their findings.
But only now, with the 4 April* deadline looming, are people starting to truly acknowledge the potential impact that the new laws could have.
Met with welcome or worry?
Anyone with a genuine desire to see greater equality in the workplace, will welcome the legislation. The underlying premise is that, if an adverse spotlight is shone on organisations with inexplicable gaps, such employers will be encouraged to take new or faster actions to address the imbalance between men and women.
But still the movement has been met with apprehension in a significant number of businesses. That’s because the effects of the reports, when published, will be profound. Examples of bias will be numerous, whether intentional or not. In fact, it wouldn’t be too extreme a statement to say that the revelations will be as significant for earnings, as #MeToo is for behaviours.
Equal pay vs gender pay
It has taken many people a long time to understand that this is not an outright equal pay discussion. So, it is important to emphasise, that organisations are not doing anything unlawful in their remuneration of staff and always stick to a level playing field.
However, if a gap exists due to a gender bias among senior roles, or the areas to bonus, the playing field should still come into question.
If an employer can genuinely interrogate a company’s data and ethically compose a narrative that honestly explains an imbalance, they can sleep with a clear conscience.
But surely a bigger question for all of us is how someone’s life choices could prevent them from progressing to the point that they could occupy a senior, higher-paid position. That to work in such a role, they would have to banish their desire for a work-life balance and any other diversions that may arise during their career. This doesn’t just apply to women of course – although as they are often the primary carer of children, they are likely to be most affected.
We all have a difficult task on our hands to ensure an entirely ethical situation across the board.
A sensitive subject
Gender pay reports stand to potentially upset many people. The BBC’s remuneration imbalance has hit the headlines for example, and is likely to be subject to legal challenge with a number of high-profile female employees quite rightly demanding not just an apology, but action.
This potential sensitivity will surely dissuade many smaller organisations from analysing their gender pay scenario. After all, they are not legally obligated to do so. But in a competitive employment landscape – and at a time when it has never been so important to embrace equality and do the right thing – wouldn’t it be great if sub-250 firms also got involved in the debate?
What is the solution?
The burning question throughout all of this, is, will the new legislation address the UK’s inequality problem? Because, whilst naming and shaming brands may get people talking about the issue, the more important thing is focusing on ‘what’s next’.
Activists will undoubtedly work hard to highlight some of the more well-known examples. And it could be a very difficult time for organisations that purport to support equality – although perhaps now is the time to introduce a new level of transparency in these sectors too.
It is likely that in time, gender pay gaps may well have been transposed into legislative penalties and we may all even know what everyone else earns. But there’s a wider challenge to tackle too which will surely take even longer to address – the extent to which society accepts how certain life choices may impact on career and pay potential.
The role of technology
Given the magnitude of work that the new legislation will create at an operational level, a final note should be made regarding the actual preparation of gender pay reports.
It is perhaps unsurprising that the CEO of a software house would advocate the use of technology here. But anyone exhibiting common sense would surely agree with this advice.
A report is underpinned by six key calculations. If a small business elects to report on their gender pay, this may just be manageable with a complex spreadsheet. But in organisations with 250 staff or more – plus a potentially endless number of remuneration variables – the administrative headache could be vast. Add to this the need to continually review data as policies evolve and the months unfold, and the resource impact may prove staggering.
In an era of automation, surely it makes greater sense for a system to take on this burden so that more time can be spent on what matters – addressing the gap!
*31 March for public sector employers