Fiona Tatton is the founder and CEO of Womanthology, having set it up in 2014 when she realised that when it came to magazines for professional women, there was not so much a gap in the marketplace as a yawning void. In response, she founded Womanthology, the digital magazine and professional community for astute women who want to be their best selves, regardless of age and appearance. In March 2023, Womanthology was shortlisted for the Federation of Small Businesses ‘Celebrating Small Business’ Diversity & Inclusion Award, and in December 2023 Fiona was awarded the Women’s Engineering Society Amy Johnson Inspiration Award.
“Addressing these underlying issues requires a comprehensive approach that goes beyond reporting numbers and requires a cultural shift within organisations.”
As I write we are rapidly approaching the annual deadline for gender pay gap reporting in the UK for 2023-2024 on 4thApril 2024, so I thought it might be worth a look back at the evolution of gender pay gap reporting in the UK to assess its impact on actually closing the gender pay gap.
Just by way of a reminder, the gender pay gap is a persistent issue that reflects the disparity in earnings between men and women. Acas guidance states: “By law, men and women must get equal pay for doing ‘equal work’. This is work that equal pay law classes as the same, similar, equivalent or of equal value.” According to the House of Commons Women and Equalities Select Committee: “The gender pay gap is a metric designed to reflect gender inequality across the workforce, rather than the difference between different people doing the same job.”
(For readers who’d like to understand more about the intricacies of the gender pay gap, as it’s a tricky beast to tame, I can recommend this guide, produced by the House of Commons Library, as a point of reference.)
2017: That was the year that was…
Let’s start by casting our minds back to 2017 when the UK Government implemented regulations requiring companies with 250 or more employees to report on their gender pay gap. (Smaller organisations can report through the portal voluntarily, with a badge appearing on their report to identify it as voluntary.)
2017 was an already eventful year, to say the least. Donald Trump was inaugurated on 20th January. There was a UK general election on 8th June that saw Theresa May’s gamble to secure more seats in order to be able to navigate through the Brexit process backfire, resulting in a hung parliament. Prince Harry announced his engagement to Meghan Markle on 27th November, and the Royal family was about to be joined by a self-declared feminist.
The UK Government’s decision to implement a reporting system meant that the gender pay gap was firmly on the agenda, notionally at least. Introducing gender pay gap reporting aimed to increase transparency and accountability in pay practices and to drive progress towards achieving gender equality in the workforce, but it got off to a shaky start.
Thanks, COVID
Due to the COVID-19 outbreak in 2020, the Government Equalities Office and the Equality and Human Rights Commission took the decision to suspend enforcement of gender pay gap deadlines for the reporting year 2019-2020, which meant there was no expectation of employers to report their data. (At the time of the announcement of the suspension of enforcement on 24th March 2020, just before the reporting deadline, more than 3,000 employers, so 26% of those expected to report, had already done so.) For the reporting year 2020-2021 when enforcement was resumed, employers were given an additional six months to report their data before enforcement action would begin.
Women, who were more likely to be front-line workers in the pandemic, were disproportionately affected. They were more likely to work in sectors where they would be furloughed, such as leisure, or worse still, laid off from zero-hour contracts and left with no income, or where they would be at increased risk of death, such as healthcare workers. The other bad news for women around the world was that COVID lockdowns meant that unpaid childcare, including homeschooling, as well as elder care, disproportionately fell to them.
On the flip side of the equation, for workers with office-based roles, organisations were forced, almost overnight, to shift to a homeworking model. Tech hardware companies around the world ran out of stock as people clamoured for equipment and scarcity was everywhere. People’s behaviour changed. The shift from office to home, alongside school closures, meant that domestic space was at a premium too. Work-life balance became work-life blend.
‘Intense’ work ahead
What followed has been interesting, if somewhat disappointing at times. Not all jobs can be carried out remotely, but there has been some backpedalling for those that can. According to Forbes, in May 2020 the then CEO of Twitter, Jack Dorsey told employees they may work from home or remotely “forever”, but just over two short years later, as reported by The Guardian, the new CEO of the renamed X unceremoniously scrapped the company’s work from home policy and, after laying off 3,700 employees, ordered its remaining staff back to the office in an email. Elon Musk announced that “[the] road ahead is arduous and will require intense work to succeed”. (I’m not sure about anyone else who works from home full time like me, but I don’t think my work has ever been anything but intense…)
Flying the flag for flexibility
But what about the companies who are flying the flag for flexibility? There are some notable examples, including insurance company, Zurich, which joined forces with Behavioural Insights, a team spun out from UK Government into a social purpose company (that became wholly-owned by innovation charity, Nesta, in December 2021.) Zurich’s work with Behavioural Insights took place to identify issues that were blocking career progression for women.
Their research highlighted a lack of applications from women for senior roles. Many of these roles have not previously been available on a part-time or flexible basis and female employees reported that this lack of apparent flexibility meant they were less likely to apply. In response, Zurich introduced an initiative to advertise all new vacancies as potential part-time, job share or full-time opportunities, and offer these alongside flexible working. Gender-neutral language was used in every job advertisement.
The results have been striking. Between 2021 and 2022 alone, nearly one in four new female hires (23%) were appointed on a part-time basis, up from just 10% in 2019. Steve Collinson, HR director at Zurich UK explained: “Our approach is about removing barriers for those who need flexibility. We are urging the Government to make businesses like ours advertise all roles as being available on a more flexible basis wherever they can.”
Other organisations such as Atom Bank have shifted to a four-day week. In November 2021 Atom became the largest company in Britain to introduce a four-day working week and reduced hours for all employees with no reduction in salary.
The move allowed all Atom employees the choice of working a 34-hour working week over four days, paid at the same contracted salary rate as their former five-day, 37.5-hour week. Mondays or Fridays are expected to be the default days off for the majority of employees, except for those working in operational and services roles whose day out of the office may vary to ensure a continuous and uninterrupted level of service for customers.
In an interview with The Telegraph, Mark Mullen, Atom’s CEO said: “We have got no regrets whatsoever. Our company has gone from strength to strength in whatever measure you apply to it. If you look at our costs, we have gone about six quarters without any material cost inflation. If you look at our sickness, it’s at an all-time low. If you look at our productivity, the timeframe to secure a business loan is one day. For a mortgage, it’s two-and-a-half days. I have got no metric that tells me this is a mistake – none.”
More female voices required
The eagle-eyed readers will notice that the spokespeople quoted so far in this article are all men. Is this a coincidence? Not at all. It’s a sad indictment of the lack of gender balance that’s pervasive in workplaces today but, from a more optimistic perspective, it’s also a sign that men can be part of the solution as well as the problem.
The FTSE Women Leaders Review team have been doing incredible work to improve the representation of women on boards and in leadership positions. Check out Charlie Godolphin’s recent post for Womanthology, based on the session she led at our Inclusion Thought Leaders’ Event. FTSE Women Leaders also ran their own event, The Changing Face of Leadership, in Manchester, just over a week ago, alongside recruitment firm, Warren Partners. Denise Wilson, FTSE Women Leaders’ CEO was joined on the panel by a stellar lineup of female leaders. You can watch a clip of the event here.
Another notable woman to follow in this space is the Rt Hon Caroline Nokes MP, Chair of the House of Commons Women and Equalities Select Committee. By way of a reminder, the Women and Equalities Committee examines the work of the Government Equalities Office (GEO). It holds the Government to account on equality law and policy, including the Equality Act 2010 and across Government activity on equality. It also scrutinises the Equality and Human Rights Commission. Caroline was another speaker at our recent event in London. I’d encourage anyone who wants to have their say and make a difference in this space to engage with the work of the Committee.
No excuse
The Women and Equalities Select Committee sensibly pointed out to Government in February 2022 that there was ‘no excuse’ for lack of ethnicity pay gap statistics with organisations already reporting on gender pay gap figures ‘already well resourced’ to report on ethnicity pay gaps too, but in July 2023 the Department for Business and Trade concluded, in response to the most recent Ethnicity Pay Reporting Consultation that, despite research suggesting that addressing race inequality in the UK labour market could boost the UK economy by £24 billion a year, voluntary ethnicity pay gap reporting would suffice.
The looming general election in the UK is shaking things up a bit though, with Labour likely to introduce a race equality act if elected, which would surely mean the introduction of mandatory reporting of ethnicity pay gaps. They have also pledged not to reduce the number of hours of government-funded childcare that working parents would be entitled to in England.
Deeds, not words
Despite decades of progress in women’s rights and advancements in the workplace, gender pay inequality continues to be a significant challenge. The UK’s gender pay gap reporting requirements have shed light on the extent of this issue and have pushed companies to address the disparities in pay between male and female employees.
One of the key successes of the gender pay gap reporting in the UK is the increased awareness and scrutiny of pay disparities within organisations. By requiring companies to disclose their gender pay gap data, employees, investors, and the public have access to information that was previously hidden. This transparency has forced companies to confront their pay practices and take action to address any inequities that exist.
Furthermore, the gender pay gap reporting has prompted conversations about gender equality in the workplace and has catalysed efforts to promote diversity and inclusion. Companies are now under pressure to demonstrate their commitment to gender equity through tangible actions — the phrase “deeds, not words” springs to mind — such as implementing equal pay policies, promoting women to leadership positions, and creating a more inclusive work environment.
Going beyond box-ticking
However, despite these positive developments, there are also notable failures and challenges in the gender pay gap reporting system. One of the criticisms is that the reporting requirements lack teeth. While companies are required to report their gender pay gap data, there are no penalties for failing to take action to address pay disparities. This has led to some companies treating the reporting exercise as a box-ticking exercise rather than a meaningful effort to achieve gender pay equality.
Gender pay gap reporting has highlighted the systemic issues that contribute to gender inequality in the workplace, such as occupational segregation, lack of representation of women in senior leadership roles, and unconscious bias in recruitment and promotion processes. Addressing these underlying issues requires a comprehensive approach that goes beyond reporting numbers and requires a cultural shift within organisations.
No regrets
It is essential to build on the successes and address the shortcomings of the initiative. Companies must go beyond compliance and take proactive steps to close the gender pay gap, including conducting pay audits, implementing pay transparency policies, and creating a more inclusive and equitable work environment for all employees. The good news is that the companies who have invested in this area clearly have no regrets.
Moving forward, companies, policymakers, and society as a whole must work together to achieve true gender pay equality and create a more inclusive and equitable workforce for future generations. Increased pay transparency is a growing global trend I discuss with Vicky Peakman of Payscale in our new podcast.
Get ready
Upcoming changes brought about by the EU Pay Transparency Directive will impact several HR and reward policies, practices, and job architecture structures. Although the first gender pay gap report publication under the Directive is not due until 2027, it is important for organisations that report to start preparing early to ensure that they have sufficient time to make the necessary adjustments and comply when the Directive comes into force.
For our part, we will keep the discussion going and we will keep bringing you the stories of the organisations who are being proactive in this space.
Elon Musk image credit: U.S. Air Force / Trevor Cokley, Public domain, via Wikimedia Commons
