Gavin Haig, CEO of Belstaff, welcomes the opportunity to narrow the gender pay gap.
Belstaff has been powered by both men and women for more than 90 years – from fearless pioneers such as Amelia Earhart and Amy Johnson, to the company structure of today, where our heads of design, marketing, communications and merchandising are successful, female leaders.
It is little surprise, then, that we embrace equality of opportunity as a means to create a high-performing team and, simply, a better company that has strength in the diversity of its employees, all of whom are paid appropriately for their contribution.
We welcome the April change in law requiring companies with more than 250 employees to publish a gender pay report. Government research has led to the unsurprising revelation that some companies – enough to warrant change – are weighted towards men being paid more than women. Transparency has been identified has a key vehicle to change opinions and to encourage action to address this imbalance.
It is, of course, important to differentiate between a policy of gender pay reporting and a policy of equal pay, which deals with the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value. Laws are already in place to make it unlawful to pay people unequally because they are a man or woman. So, if there is a bias in gender pay levels, it may not just be a case of unfair, unlawful practice – dealing with it may also be about actively encouraging gender diversity across the whole company, including the more highly remunerated roles.
So, what should we hope for from this new legislation? Identifying a gender pay gap highlights the difference in average pay between all men and women in a company’s workforce. If a high gender pay gap is identified, it may indicate that there are issues to be dealt with, and narrowing the data may make it possible to identify the issues more precisely.
And this provides key intelligence for stakeholders: prospective employees, existing employees, the leadership team or owners of any given company. It provides a basis upon which to make choices. Do I join? Do I stay? Is this what I want from my company? In today’s world, where transparency has become both a clear context and a strategy for incentivising change in the status quo, the new legislation may act as an enabler and accelerator of change.
How much impact can legislation have upon narrowing the gender pay gap? The April initiative by the government is not in itself legislation that will directly effect this: it is simply designed to encourage debate and action towards a gender meritocracy regarding compensation. Real change perhaps starts more powerfully with a company’s leadership, values and culture, in valuing the contribution that both men and women can make, and in ensuring that higher-paid positions are open equally to women and to men. If transparency can educate, incentivise, and pressurise business towards this, the April law can play a part.
Finally, it is also increasingly clear that diversity, including gender diversity, just makes good business sense. The 2015 McKinsey report, Diversity Matters, found that “companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry medians”.
Furthermore, “in the UK, greater gender diversity on the senior executive team corresponded to the highest performance uplift … For every 10% increase in gender diversity, EBIT rose by 3.5%.” Correlation may not equal causation but if closing the gender pay gap means developing higher-performing teams with higher-performing results, it’s just common sense, isn’t it?
Perhaps, then, the April legislation is above all another step towards making common sense common practice.
Gender pay gap reporting requirements
- Gender pay gap reporting will be introduced on 6 April when the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 come into force.
- Companies with 250 or more employees as at 5 April must report on the gender pay gap by 5 April of the following year.
- The report must include: mean and median gender pay gaps; mean and median bonus gender pay gaps; the proportion of men and women receiving a bonus; and the proportion of men and women in each quartile band.
- A senior executive must make a written statement to certify that the information is accurate.
- The information must be published on the company website and submitted to a government website.