Diversity & Inclusion

Tackling the gender pay gap with data

The gender pay gap remains a significant issue in most UK workplaces, and the most recent statistics indicate that women still earn 14.9% less than men. In 2017, the UK government introduced gender pay gap reporting legislation, which requires all companies with over 250 employees to report their gender pay gap data. But reporting alone isn’t enough. The HR world has a critical role to play in using this data to identify and address pay disparities.

Data collection and analysis

The first step in using data to address our gender pay gaps is to collect and analyse the relevant information. This includes gathering data on employee salaries, job titles, work levels/grades, and other contextual information such as experience and education level.

This information can then be analysed to identify any disparities in pay between male and female employees. We can also use these insights to identify any barriers that may be preventing women from joining or advancing within the organisation, such as a lack of representation and role models in senior positions or unequal access to training and development opportunities.

Developing strategies

Once the data has been analysed, we can begin to develop strategies to address any disparities or barriers that have been identified. The gender pay gap reporting legislation gives organisations the option to publish an action plan alongside their pay gap data, outlining the steps they will take to close their pay gap. I’d encourage you to do this, as it demonstrates organisational commitment and keeps leaders focused!

One effective strategy is to conduct a pay analysis, which involves comparing the salaries of male and female employees who hold similar positions within the organisation. There is often confusion between equal pay and the gender pay gap, with some employers mistakenly assuming they have addressed the issue by paying men and women the same for the same work.

Despite this, differences due to scales or banding can become embedded into an employee’s pay over multiple years. If disparities are identified, adjustments can be made to ensure that all employees are being paid fairly for their work.

Another strategy is to implement policies that support women in the workplace, such as proactively offering flexible working arrangements or providing training and development opportunities to help women advance within the organisation. By creating a more supportive environment for women, companies can both help to close their gender pay gap and ensure all employees have the opportunity to reach their full potential.

Communicating Results

Under the gender pay gap reporting legislation, companies are required to publish their pay gap data on their website and the government’s gender pay gap reporting portal. It is also important to communicate the results of any data analysis and strategies implemented to address the gender pay gap to all employees. This includes sharing information on any changes to pay structures or policies that have been made, as well as providing regular updates on progress toward closing the pay gap.

By communicating openly and transparently with employees, companies can build trust and create a more inclusive workplace culture.

Blaming COVID

The COVID-19 pandemic has had a significant impact on the UK workforce and the gender pay gap. With many companies facing financial challenges and a shift to remote work, progress in closing the pay gap has slowed down or even stagnated. However, this shouldn’t be seen as an excuse to ignore the issue. Instead, HR professionals should use this as an opportunity to re-evaluate their strategies and ensure that they are doing everything possible to close the gap.

Improving Quality and Quantity

One of the key challenges in using data to tackle the gender pay gap is ensuring that the data is accurate and relevant. HR professionals must ensure that they are collecting high-quality data on a regular basis, including data on bonuses, overtime, and other benefits that may contribute to pay disparities. We should also look to combine our payroll data with data from employee surveys and focus groups to gain a better understanding of the experiences of female employees and identify any additional barriers to closing the pay gap.

Using Data from Multiple Sources

In addition to internal workforce data, HR professionals can use data from external sources to gain a more comprehensive understanding of the gender pay gap. For example, they can review industry-wide salary surveys and government statistics on pay disparities to identify trends and compare their own pay gap data to industry benchmarks. By using data strategically from multiple sources, HR professionals can develop more informed strategies to address pay disparities and improve overall equity in the workplace.

Inclusive Recruitment

Tackling the pay gap starts in recruitment. But reducing opportunities for bias to creep into hiring processes is only one part of the puzzle. One often neglected piece is to ensure you’re advertising inclusively in the first place. This is much harder to do, as things like inclusive language may conflict with approved style guides, and increasing the number of locations to advertise increases the cost of the recruitment process. This is often to the detriment of diversity in the mid-level roles which feed into management pipelines, as the roles themselves aren’t seen to justify the extra expense.

Measuring your recruitment properly and at scale can help identify inequalities that may not seem obvious at the individual level. By recording at each stage of the process (applications, shortlisting, appointments, offers made and accepted) statistical anomalies become clearer and barriers become more visible.

We like to concentrate on getting more people into the pipeline, but often forget about the women who exit it. Exit interviews are often a formality but but done right can provide valuable insights into what’s going wrong with your retention strategy.

Socioeconomic Factors

While the gender pay gap is often attributed to differences in salaries between men and women in the same roles, there are several other socioeconomic factors that can contribute to pay disparities. For example, the choice to have children and the cost of childcare can limit women’s career progression and earning potential. HR professionals must take a holistic approach to addressing pay disparities, including addressing these socio-economic factors and promoting policies that support women’s career advancement and work-life balance.

We also need to recognise that many mothers make the choice to prioritise their children and deprioritise their careers beyond maternity and even beyond early years. This can include avoiding extra responsibility, choosing roles solely on the criteria of working patterns (often in a different industry or business area than before) or eschewing development opportunities.

Tackling the gender pay gap requires a commitment from HR leaders to use data and analytics to identify and address disparities in pay. The gender pay gap reporting legislation provides a framework for companies to collect and report their pay gap data and develop action plans to close the gap. HR professionals must collect high-quality workforce data, use data strategically from multiple sources, and develop effective strategies to address pay disparities. They must also consider socio-economic factors that contribute to pay disparities and ensure that their policies support women’s career advancement and work-life balance.

By taking such a comprehensive approach to closing the pay gap, we can create more inclusive workplaces that support the success of all employees, regardless of gender. Coupled with collecting and analysing data, developing effective strategies, and communicating openly with employees, data-led HR can make a real difference to employee’s lives that extends far beyond organisational level pay gaps.