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Rethinking your long-term talent strategy to address pay gaps





Posted by Sarah Nash on 28 October 2022

Rethinking your long-term talent strategy to address pay gaps

Gender Pay | Gender Pay Gap | Gender Pay Reporting

How do you make sure you always hire the right person for the job, while maintaining a balanced outlook when it comes to gender, ethnicity and disability? To answer this, we need to explore five main areas of talent management: Diversity in recruitment; Succession planning; Performance management; Learning and Development; and Retention. In this article, I’ll be looking at the first three of these key pillars.

Attracting and recruiting an inclusive and diverse workforce

Let’s settle on a key assumption that we always want to hire the best person for the job. That makes a candidate’s gender or background secondary, but by monitoring policies and processes we can always ensure we’re driving an inclusive approach.

If we take a step back, let’s look at our talent pool and the employee brand and value proposition we are creating. If our talent pool is diverse, logically we are in a better position to choose the best person from a broad range. To be able to attract that broad range, we need to make candidates from every possible background feel a connection with our company, and then everything we do through the key phases of job creation and recruitment needs to uphold that feeling.

Advertising – If all your employees look and sound the same, are you falling into the trap of always advertising in the same way, with the same resources and to the same group of people? By expanding your talent sourcing methods, you could tap into different cross-sections and find fresh talent pools you may have been neglecting. That means looking at different methods, different media outlets and even different parts of the country.

Applicant pool - Are your adverts sparking a diverse response? If not, try and understand whether your language might be causing an unconscious bias in who it’s reaching, and discouraging an array of applicants from even considering it. Are your website career pages and job descriptions appealing to a broad audience? If not, these are easy to fix.

Interviewees – If you get to the end of a session of interviews and find it hard to tell the candidates apart, chances are they are similar. Scrutinise who you’re taking forward to the interview stage and you will force a rethink.

Hires and starting salaries – Examine whether your starting salaries in a role are the same for men and women, or across different groups. If people are hired on different starting salaries for the same job – and we know some candidates are better at negotiating than others – you start with a pay disparity that becomes harder to rectify, and can mushroom over time.

Succession Planning

If recruitment practices are fully inclusive and diverse, it follows that the internal management of talent through an organisation can also be inclusive and diverse. For companies to organically grow diverse and differentiated leadership groups, they need to look carefully at their succession planning. Only by doing this and taking a long-term view will they grow a diversity of leaders for tomorrow.

The Women Count 2022 report examines the proportion of women on Executive Committees in FTSE 350 companies. Most tellingly, it highlights how like attracts like if recruitment patterns are left unchecked. At FTSE 350 listed companies, 75% of executive committee members are men, 96% of chief executives are men and 82% of chief financial officers. The pathways towards CEO level in these companies are dominated by men, in fact three out of four executives aspiring to CEO level are men.

This is not a negative critique around male domination. Conversely, companies with female CEOs are over four times more likely to appoint women executive directors onto their main board, so it goes both ways.

It follows that if your pipeline of ‘top talent’ making its way through is predominantly white and male, you're not going to have a diverse board. It may be that every one of those men was – still is - the right person for the job, but by making sure your processes are non-biased you safeguard against policies that exclude and move towards a succession planning model that opens new avenues of opportunity to a broader cross-section.

Performance Management and promotions

If you get your succession planning right, it will naturally segue into your performance management structures because you will already be identifying a clear pipeline of home-grown talent able to move on up through the gears. This strategy of nurturing and rewarding talent through performance not only saves on the cost of recruitment, it also gives employees a motivational boost in terms of their career pathway and aspirations.

A key part of performance management is promotions: who receives them and how they are managed. Part of your long-term strategy should be to measure and scrutinise. Are promotions being managed fairly, with men and women being promoted at an equal rate, and by the same percentage increase? How much is negotiation or other drivers playing a part in the salary increases employees are receiving? These same questions can be applied to gender, ethnicity and other factors.

How are out-of-cycle pay increases affecting the pay gaps in your organisation? Typically, these are used for market adjustments, increases in responsibility or pay equity issues, but they should be avoided for anything included in the pay review cycle such as performance. Research shows that men are more likely than women to ask for a pay rise and are more likely to receive a larger sum when they do, so our processes need to pre-empt, control and monitor these negotiations. If poorly managed, ad hoc adjustments can quickly impact pay gaps, especially if they favour one gender or ethnic group.

There is no short-term answer here, no silver bullet. These questions and measures need to be considered and applied in a measured way over time, moving towards a long-term strategy that is inherently fairer and more inclusive.

In my next article, I’ll pick up on the other key pillars: Learning & Development and Retention.

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