Tag: gender pay gap

Employers told to voluntarily report ethnicity pay  

Ever since the Gender Pay Gap Reporting Regulations were introduced in 2017 the industry has been discussing whether the UK Government would introduce mandatory ethnicity pay reporting requirements for UK employers. Over the years, there have been several calls to action and lobbies for the Government to do so but pleas have fallen on deaf ears as last week, the Government confirmed that “at this stage” it will not be introducing a mandatory requirement for UK employers to report on their ethnicity pay – much to the dismay of many industry bodies, regulators and employers.  

Considering the sharp focus on DE&I post COVID-19, this decision is somewhat disappointing as Laurie Ollivent, Senior Associate, Employment & Incentives and the Diversity Faculty at Linklaters commented: “Whilst the Government hasn’t ruled out introducing mandatory ethnicity pay reporting in the future, it is clear that we should not expect it as a legal requirement in the UK anytime soon. But what the Government has said is that for those employers who choose to voluntarily report on their ethnicity pay gap, they are supportive of the recommendation that employers should publish accompanying action plans and a diagnosis which explains any pay gap and addresses any disparities, and once employers are equipped with a trustworthy, consistent standard for reporting, they should take meaningful action to identify and tackle any causes of disparate pay. In other words – employers need to focus on their narratives. Whilst we accept there are challenges to ethnicity pay reporting beyond those employers face with gender pay reporting which means that the data alone will only ever be a blunt tool to identify potential disparities, the expectation of a narrative without further guidance on what this should look like and the requirement for employers to tackle any causes of disparate pay and report on progress may be off-putting for some businesses considering whether to voluntarily report on their data at this stage and risks halting progress on voluntary reporting rather than encouraging it.  

Simon Kerr-Davis, Counsel, Employment & Incentives and the Diversity Faculty at Linklaters also made comment: “The Women and Equalities Committee report from early 2022 highlighted the increase in employers choosing to voluntarily report on their ethnicity pay gaps. The report states that in 2021, 19% of UK employers voluntarily reported on ethnicity pay – up from 11% in 2018. Whilst this sounds promising and is a large increase, many believe that mandatory reporting obligations are needed – much in the same way as gender pay reporting obligations – for other businesses to follow suit and really drive and achieve change across UK business. 

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A mere 1% of employers report reducing pay gaps

According to results from Mercer’s new UK Gender and Ethnicity Pay Gap trends report75% of respondents disagreed with government’s decision to suspend gender pay gap reporting in 2020. Despite 74% of respondents reporting that their numbers have shown continued commitment for inclusion despite the suspension, there appears to be minimal progress made in closing the gap with half of respondents claiming to see little or no progress made year-on-year. A mere 1% of employers reported reducing their pay gap by more than 10%. The results of the report offer a clear indication of how businesses continue to struggle in closing pay gaps – a trend which is expected to continue. Considering the pandemic has brought DE&I into sharp focus, businesses should allocate more attention to pay gaps in a bid to attract and retain talent in a very challenging market.

Findings in the report revealed that fewer than one in three (30%) employers reduced its gender pay gap by 2% between 2019 and 2020. Granted, focus in 2020 was finding new innovative ways to work with the arrival of the pandemic, but alarmingly, a mere 18% of employers reported an increase in pay gap from 2019 to 2020. Recently reported government figures on the UK gender pay gap numbers suggest a median gap of 10.4% for 2020, compared to 9.7% from 2019. A similar theme to Mercer’s 2021 Gender and Ethnicity Pay Gap Trends survey; and highlighting that focus on pay gaps has dwindled over the last two years.

Michelle Sequeira, Diversity, Equity and Inclusion Consulting Leader, Mercer UK commented: “Key drivers of pay gaps range from issues with attracting and retaining women to failing to eliminate the barriers to career progression that prevent female and diverse employees from entering more senior roles. There are employers who have also shown a willingness to change and they are encouraged to conduct deeper analysis to get to the root of the problem and put action plans in place.”

Following many global events surrounding race, it’s believed that employers are now looking beyond gender. Nearly 65% supported legislation enabling ethnicity pay gaps to be addressed and reported with 45% of respondents claiming they felt under pressure to conduct ethnicity pay gap analysis. Even though ethnicity pay gap reporting is not yet a legal requirement in the UK, according to Mercer’s report, 74% of employers have collected data or are planning to do so in future. More than half (57%) are conducting dry-run analysis to calculate ethnicity pay gaps, with 31% reporting that they have published or are planning to publish their pay gaps. Internal stakeholders and employees are adding pressure to organisations to make changes within the organisations and wider society.

Ms Sequeira made final comment: “To truly make a difference, employers must look beyond their pay gaps. In addition to examining ethnicity pay gaps, our report encourages employers to widen the pools from which they recruit and take steps to reduce unconscious bias in processes. Most important of all is creating a genuinely inclusive workforce that allows people to be themselves and thrive both in and outside of work. It is ineffective to offer working parents career development opportunities and salaries if they are expected to extend their working days in ways that negatively impact their family lives. It is futile to hire and train up diverse colleagues if they join a non-inclusive culture or are repeatedly overlooked for promotion. Understanding your current state and engaging and upskilling senior leaders is so key to help them realise where they are going wrong.”

 

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Pandemic has exacerbated gender inequality

A detailed report, produced by Sharon Peake, founder and CEO at Shape Talent, has exposed why women in the workplace across Britain and Europe have been so severely impacted by COVID-19.

Sharon Peake, founder and CEO at Shape Talent, said: “The fact is: pre-existing gender inequalities have been exacerbated by the COVID-19 pandemic and many of the hard-earned gains in women’s equality in the workplace, particularly at leadership levels, have been eroded. Women, the world over, are exhausted by the impact of gender bias.”

Predictions by The World Economic Forum expect that the gender pay gap is not going to close for another 136 years, as a direct impact of the pandemic. This is an increase of 36 years on the previous Global Gender Gap Report, which predicted 99.5 years.

Peake explained: “Since time began, gender equality has been viewed as a women’s issue and the focus has been on how to ‘fix’ women. This report does not exist to tell us how unacceptable this is – it is here to provide business leaders with the insight that can focus their strategies on sustainable change and ultimately accelerate gender equality.”

The paper outlines the three barriers that are summarised below:

  • Societal barriers: Subtle and often unspoken cultural cues and messages that reinforce the ways that men and women ‘ought’ to think, behave and feel
  • Organisational barriers: The hurdles experienced in the workplace and a combination of systemic obstacles, cultures and norms which disadvantage women
  • Personal barriers: A diverse range of hindrances, including how women present in the workplace and how they manage the work-family interface.

The paper lists eight guiding principles companies can adopt to counteract the barriers; these are:

  1. Link inclusion and diversity to business strategy
  2. Set the tone from the top
  3. Make inclusion part of cultural change programme
  4. Take an evidence-based approach
  5. Engage men
  6. Build and accelerate the pipeline
  7. Enable a level playing field
  8. Narrow the focus
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Only 42% of tech companies offer training and development

Female employees have gained ground in the workplace, however large skill gaps still exist when it comes to opportunities for professional development and career advancement. This, according to findings released by Skillsoft in its 2021 Women in Tech Report.

The report revealed a misalignment between the workplace benefits women in tech are seeking and what is currently being provided. For example, while 86% of respondents cited that opportunities for professional development and training as extremely or very important to them, a mere 42% said their employers currently offer this as a benefit. Additionally, when asked about the top challenges they have faced while pursuing a tech-related career, nearly a third of women surveyed (32%) pointed to a lack of training.

Potoula Chresomales, SVP, Product Management at Skillsoft commented: “Organisations around the globe are looking for ways to address their skills gaps, and in many cases, the answer lies within via their existing workforce. Women make up less than 40% of the global workforce, and for that number to increase, female employees must be empowered with continuous training, professional development, and career advancement, as well as equal pay. The time is now for organisations to tackle gender disparity head-on. By doing so, we can build more inclusive, equitable, and competitive businesses.”

Skillsoft’s 2021 Women in Tech Report highlights a few ways organisations can better empower female employees. Here they are:

Provide and encourage opportunities for certification

  • When asked how certifications have helped advance their careers, respondents reported gaining more responsibility (52%), earning higher salaries (34%), and receiving promotions (32%), among other benefits.
  • Despite business analysis and cybersecurity being identified as leading areas of interest, just 22 percent and 18 percent of respondents, respectively, hold corresponding certifications. 19 percent report holding no certifications at all.

Make an effort to reduce gender bias in STEM

  • 70 percent of women surveyed reported that men outnumber them in the workplace at ratios of two-to-one or greater.
  • The highest percentage of men in leadership roles have 15 to 20 years of experience versus 26 or more years for women.
  • To encourage more women to pursue tech-related careers, respondents said organisations should provide opportunities for professional development and training (55%), childcare (47%), career coaching, mentoring, and counselling (43%), and an equitable work culture (41%).

Alleviate the unique on-the-job challenges women face

  • More than a third of respondents list their biggest challenge as a lack of equity in pay. This is followed by balancing work and life (36%) and a lack of equity in opportunities (33%).

Ensure training is timely and topical

  • When selecting a training provider, women in tech seek scheduling capabilities (34%), relevant course availability (32%), and opportunities for hands-on practice (32%).
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Lack of transparency around salaries hinders women

A recent survey from Glassdoor, the jobs and insights agency, has found that women across the UK are at a disadvantage because of a lack of transparency around salaries. A mere 25% of full-time employees in the UK strongly agree that their employer is transparent about pay with 54% of workers admitting they aren’t comfortable discussing their salary with their boss.

The survey suggests that the lack of discussion around pay is contributing to inequality for women. Sixty-seven percent of female workers didn’t ask for a salary increase in 2020, which equates to 30% more than men. In the last year, 35% of those working in the female-dominated industries of education, healthcare, and hospitality asked for a wage increase compared to 62% of those working in the traditionally male-dominated world of finance and 56% in tech.

According to the results of the survey, women are also 26% less likely than their male counterparts to ask for more money in the next 12 months, with 37% of women planning to ask for a pay rise next year.

The survey revealed that over half (56%) of women admit they lack the confidence to ask for a pay rise and as a result, only 33% of female workers negotiated the salary of their last job offer (compared to 45% of men). Two in five (43%) women revealed that they simply accepted the salary that was offered to them (compared to 35 percent of men).

Nearly three in four of all employees (73 percent) got the wage increase they asked for last year, indicating that women will continue to miss vital opportunities to increase their earning potential.

Jill Cotton, Career Expert at Glassdoor commented: “Workplace transparency is a hallmark of many successful companies and more transparency is needed in the future. One in two women admit to lacking confidence at work – companies should open an honest discussion around salary from the point that the role is advertised and throughout the person’s time with the organisation. Having clear salary bands limits the need for negotiation which, as the Glassdoor research shows, has a detrimental effect on female employees’ ability to earn throughout their career.

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