Following the most recent mandatory gender pay gap reporting on 5 April 2023, the Guardian newspaper (after completing its own analysis of the figures) published an article stating that the median gender pay gap remains stubbornly wide at 9.4%. Surprisingly (or perhaps not at all surprising to some) the gap has remained similar to what it was in 2017-2018 when employers where first required to publish the information.

The most recently published Office for National Statistics figures from 2022 also show that progress to close the gap is slow and it is clear that to see an improvement, employers need to do more.

While the appropriate action to tackle an established gender pay gap will differ across sectors and organisations, we have the following top tips to encourage a reduction in your organisation’s gender pay gap (whether your organisation reports or not):

1. If you do not already report, conduct a review to determine where your organisation is in terms of the gender pay gap. If you have a gap, set targets for improvement, and plan the steps that you will take to reach that goal.
2. Use structured interviews for recruitment and promotions. This can prevent any unfair bias creeping into an interview process as a structured interview means that all candidates are asked the same questions in a predetermined order and format. Following the interview, the applicant’s responses can then be graded with pre-specified, standardised criteria and this would prevent the likelihood of any unfair bias affecting the decision of who to hire e.g., in respect of potential childcare commitments.
3. Do not use an employee’s salary history when configuring offers for new employees as this can “bake in” previous discriminatory pay practices. Pay gaps often begin at the start of a woman’s career and compound over the years when prospective employers base the salary offered on a candidate’s previous pay, rather than the relevant salary for the role that they are applying for.
4. Disclose the pay range at the outset of the job advert. Where employees or applicants have more information about opportunities outside of their current positions, particularly about pay, they are more likely to apply for promotions.
5. Consider going a step further and utilising pay transparency. When conversations around pay happen in secret, it can be easier for discrimination and bias to factor into compensation decisions. Pay transparency aims to help employers and employees avoid discrimination and pay gaps by permitting employees to discuss, disclose or enquire about compensation. Of course, an employer must be very confident that there are no equal pay or discriminatory pay practices in their organisation prior to implementing pay transparency which is usually achieved by having clear job grading and through conducting an equal pay audit (warning: seek legal advice before conducting an audit to ensure that any audit prepared is subject to privilege and not disclosable where possible).
6. Offer and encourage flexible working to make roles more accessible to women who are more likely to be balancing unpaid care and family commitments and of course, to encourage men who wish to take on such responsibilities through flexible working as well. Both the House of Commons and the Women and Equalities Committee have acknowledged flexible working for all ‘lies at the heart of addressing the gender pay gap’. As a result, companies should seek to implement flexible working practices and have a flexible working policy.
7. Offer clear, fair and transparent promotion criteria/programmes which will assist to ensure that these are accessible to all. It is also important to consider how these are implemented into practice, e.g. ensuring that part-time employees (who are traditionally often female) are not overlooked for promotion opportunities and are actually applying for promotion/being put forward for it. If not, why is that and what can be done to counter that?
8. Encourage men to use shared parental and other family friendly leave so unpaid care and family work is more evenly split. Doing so will allow women time off from parental responsibilities and more time to commit to their careers.
9. As with other forms of bias and discrimination in the workforce, raising awareness through training programmes can also equip employees with the knowledge and tools to recognise and address sources of inequality. Unconscious bias could be contributing to the pay gap in recruitment and promotion practices. If you are interested in hearing more about our employee training programmes on topics like unconscious bias and flexible working requests, please do get in touch.
10. Consider whether it would be worthwhile expanding your gender pay gap calculations by including other calculations. One example is framing calculations at different levels of the company structure to identify issues such as where the gender pay gap starts and when it becomes exaggerated. For example, in a law firm, you might consider framing the structure for solicitors/senior solicitors, associates/senior associates, directors and then partners. By assessing gender pay gaps by job levels, this can provide a granular picture of what is happening at different levels of seniority. Looking at this detail means that you can target where changes need to be implemented.

Whilst some of our top tips may seem obvious, they can make a big difference. In addition, many of our tips reflect measures required as part of the new EU Pay Transparency Directive.

The new EU Directive aims to combat pay discrimination and help close the gender pay gap in the EU. While the Directive will of course not apply to the UK given we have left the EU, businesses with operations across EU member states will need to consider these new requirements when they come into force in those jurisdictions. We anticipate that there may be consequent pressure to adopt the same pay transparency practices across the business, including in non-EU member states, from employees and expectant potential new recruits. In a tight labour market, now is the time to take the steps to close your gender pay gap.

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