Understanding your Gender Pay data and turning this into actionable intelligence
There has been little progress* (4%) made in narrowing the gender pay gap since mandated by the Gender Pay Gap Regulations in 2017. The average pay gap of employers assessed remains stubbornly at 14.3% (ONS). According to a 2023 Fawcett Society report, at the current rate of change, the pay gap between men and women will not close until 2051, 28 years from now. While the disparity is nearly negligible among individuals below 40, a notable wage gap persists for those aged 40 and above, highlighting the substantial impact of the so-called motherhood penalty. With the current UK average gap surpassing the OECD average of 13.8% (according to PwC), businesses must look beyond the mandated gender pay regulations and explore the factors influencing their wage gap, taking necessary actions to rectify it.
There continues to be a push from all corners to make action plans mandatory for employers with experts saying narratives are more important than headline data. However, to build a better understanding, a richer narrative, and an action plan, companies must recognise the importance of data in informing a deeper level of insight.
Continually analysing the bare minimum will make it very difficult to know if:
- you are doing all the right things across gender-related work initiatives, pay processes and policies to reduce the gap
- your policies and processes are pulling the gap in the wrong direction
- you are doing a mix of both which means you could be cancelling out the effects and consequently stalling the chances of year-on-year improvement
So many of our clients are turning their attention to this problem and the reality is that for all of them, the solution is to delve deeper into the data.
Taking a deeper dive into the data provides a more nuanced picture of the gender gap, and highlights where there are clear issues that need to be addressed. So, how do you get to the crux of your gender pay gap, how can you understand the factors that contribute to differences, and how do you go about creating action plans that will make an impact? Essentially, what are the drivers that will truly help turn the dial on the gap in your organisation?
The first step is to identify these metrics and associated data and once established it will allow you to track and report on progress over time. Whilst the extent of a deep dive analysis may feel overwhelming, most organisations already collate much of this data. The recommendation is to start where you have data and see where that leads you. Over time you can build upon the weaker areas of insight, where data is lacking.
Identifying the data
To identify the type of data required an organisation should consider the following: -
- Do you have a “Grey Economy” - i.e., do you operate out of cycle ad-hoc pay rises and if so, how much is spent, and what is the gender split?
- Do you know the gender split of newly promoted employees over the last year? How confident are you that annual promotional reviews are carried out fairly and equitably? Are there areas for improvement in terms of managing promotions? Is there too much manager discretion?
- Are those with the highest potential most likely to be paid below/above/at market rate? Is there a gender difference?
- Of those who achieve higher pay rises i.e., over 10% who gets them, what’s the frequency and in which departments? Are they concentrated in male-dominated areas?
- What proportion of employees are at the top of their pay band, and of those what sort of performers are they? Is there evidence of a glass ceiling?
- Are your processes for pay benchmarking, the overall management of pay and annual pay review/pay progression robust? i.e., how consistent is your application of pay policy when setting starting salaries for new employees? If you adopt different market positions for different locations or specialisms, how confident are you in your defence of pay differences based on these factors?
- What is the gender split of those recruited into lower-paid roles in your organisation?
- What about leavers? Are men and women leaving the organisation at different rates?
- Do aspects of pay (such as starting salaries and bonuses) differ by gender?
- Do men and women receive different performance scores on average?
- What are the promotion rates for females in Part-time roles versus their male counterparts in full-time roles? Are you doing all that you can to support part-time female employees to progress?
- Retention: What does voluntary turnover look like across the various gender brackets compared to the company’s overall average turnover? Does the company have any an issue retaining certain groups of employees?
- Recruitment: Analysis of new hires in the first year of service – are more females staying, or going?
- How does age impact your gender pay gap? Research has shown that women often face a double-whammy in their careers and earning potential, with responsibilities for dependent children and then for caring responsibilities for older relatives.
At Innecto, we can help you lift the lid on what’s leading to differences within an organisation and enable the development of tailored approaches that will make the most impact. Our three levels of service, tailored to your current strategy and challenges, also provide you with the opportunity to not only meet the legal requirement but also identify the underlying reasons behind a gender pay gap and how to address them. To find out more, email me (firstname.lastname@example.org) or call our consultancy team at +44 (0)20 3457 0894.
Or download our free guide to approaching Gender Pay Gap reporting in 2024 and 2025 here.