Fairness in Pay Part 3 - Equal Pay: Time for a rethink
HR teams… Assemble!
Here at Innecto we’ve been conducting equal pay audits for over a decade, but recent cases have shown that some employers are only now realising the extent of the problem. It’s clear that there are still several systematic barriers to achieving equal pay and we in HR need to work collaboratively to pinpoint and remove them.
Let’s start with reward. First things first: what is equal pay?
The law says that ‘work of equal value’ (where the work conducted is regarded as equally challenging) or ‘like work’ (people doing the same or similar jobs) should be paid the same, regardless of gender. Now that does not mean that everyone should get the same. You can of course differentiate on performance, and where market differentials show that although work may be of equal value, the market for one role is different to another.
But therein lies the rub: the market in question is based on current incumbents, via salary surveys, and so reflects existing gender bias.
A typical supermarket, with predominantly female shop workers and predominantly male distribution depot workers, can compare themselves to other supermarkets to judge their pay position against the market. The problem is that if all your competitors have the same gender distribution across types of roles, then this skews the market data and your comparison just reinforces the gender-segregated market. Male distribution workers, for example, will end up with a higher market rate as it was already inflated to begin with.
So we end up in the strange situation where the market itself is unfairly distorted, but currently it is a genuine material defence under equal pay legislation to justify the difference on this basis… so long as you can show that your company regularly compares pay to the market and is not just using it as a defence for an equal pay claim.
So what can we do about this? To start with, I think it would be useful to have a fuller understanding of the make-up of the market data which reward specialists rely so heavily on. Gender isn’t currently a feature but perhaps if gender data was collected alongside salary information we would have a clearer view on the relationship between the two.
However, better understanding of pay data only takes us so far. That’s why it’s time for a team effort with our HR colleagues to ensure companies treat their female employees just as favourably as male counterparts - all the way from recruitment to retirement.
My colleague Sarah Lardner hit the nail on the head when she spoke on BBC radio about how difficult it is to encourage women into traditionally male roles without first addressing the gender segregation inherent in many recruitment processes. And once women are hired, it’s the job of our colleagues in Learning & Development to ensure that all employees have the chance to further their career through personal and professional development. For example, it used to be fairly common practice for supermarkets to refuse training for part-time staff, without a thought for how this would stall career progression and entrench low earning potential for this predominantly female group of employees.
We’ve come a long way down the road to equal pay, but the end is not yet in sight. Recent equal pay cases involving Tesco, Sainsbury’s and Asda will take several years to go through the legal system and in the meantime similar discrimination claims may arise at other large companies. Unfortunately, there isn’t a silver bullet solution; instead it’s up to all of us in HR to pool our insight and make sure every employee gets a fair deal.
Interested in finding out more about equal pay at your company? Give us a call on 020 3457 0894 or contact email@example.com.