COMMUNICATING THE GENDER PAY GAP
In April, businesses across the UK released data on their gender pay structures. While some reported a 0% differentiation, for others a clear pay gap has called their acumen into question. Stephanie Adams examines how effective communication strategies can mitigate the impact of the pay gap on stakeholder relations
By 4 April, 9,000 UK businesses were required to release data on their gender pay gap. Now public consciousness about pay gaps is changing expected workplace structures. Bringing negative gendered power-dynamics into the light is destroying the reputations and shareholder prices of many perceived as perpetrating or being complicit in workplace gender disparities. For those refining or developing a gender pay gap communications strategy, it’s crucial for the ongoing reputation of businesses to know how to disclose gender pay gap information to internal and external stakeholders.
Both inside organisations and with the public, business must be transparent when it discloses the results. Whatever the internal reasoning may be for its findings, a crisis communications strategy needs to be in place to deal with how things will appear and what the plan is to fix it. Specifically, the heads of organisations will have to be ready to own up to and commit to change. And to understand gender pay gaps, companies need to know how these gaps differ from issues to do with equal pay.
Equal pay refers to a legal standard outlined in the Equal Pay Act (1970) and Equality Act (2010), whereby people must be paid equally for equal work. The gender pay gap, however, refers to a company’s mean and median gender pay gaps, irrespective of seniority. A common example of this scenario is when senior leadership roles in the highest paid positions are staffed by men, trumping the average pay of men in a company over women, even if lower-level positions are held at salary parity. For the UK government, recognising and tackling the existence of gender pay gaps is top of the agenda; its website delivers tips on how to phrase this ‘Supportive Narrative.’ It says, “A gender pay gap doesn’t necessarily mean your organisation has acted inappropriately or discriminatorily. Adding a narrative helps anyone reading the statement to understand your organisation’s view of why a gender pay gap is present and what the organisation intends to do to close it.” However, companies known for having the worst responses to the gender pay gap will not sit well with the public and investors, nor existing staff and potential employees.
According to the OECD, since 2013, 25 countries have instituted national reforms to deal with wage disparities. Social acknowledgement of this gap is happening on a global scale. Describing the situation, author of ‘the Gender Agenda,’ Ros Ball, says, “A huge part of it is getting people to acknowledge that gender bias is there. It is starting to happen, and things like gender pay gap reporting are going to force companies to do that.”
Nevertheless, the gender pay gap in the UK has not decreased in the three years prior to April 2017, sitting steadily at 14.1%. Dawn Butler, Labour MP for Brent Central and shadow minister for women and equalities explains this stagnation. “It’s been a lack of willpower, also a lack of guidance on the part of the government,” says Butler. Amber Rudd, former home secretary in the Conservative government, was contacted but did not reply in time for publication.
Coinciding with International Women’s Day, Butler announced that the Labour Party would set up an accountability structure to incentivise businesses to disclose their gender pay gaps, including fines and rewards. She says the data doesn’t go far enough. “Once you report it, there needs to be other steps associated with it in order to close it.” This hands-on approach from Labour differentiates itself from the Conservatives, with Theresa May’s government championing the release of this data while hoping that it will speak for itself. Going forth, the best way to keep businesses accountable is debatable.
Helen Pankhurst, author of ‘Deeds Not Words: the Story of Women’s Rights Then and Now,’ and descendant of founding suffragettes Emmeline and Sylvia Pankhurst, spoke about the current scheme. Pankhurst says, “Enforcement doesn’t have to be quotas. Enforcement can be reporting and then you rely on society and then individual activists and then the media, but I don’t think you can wait for the companies to do it themselves.” However accountability is implemented, there is consensus that business loses its privilege to anonymity when it comes to this data.
“Companies need to have all-inclusive talent strategies that enable all colleagues, whatever their background, gender, ethnicity, religion, sexual orientation, or whether they have a disability, to fulfil their potential”
In March, London-based consultancy PwC released a report highlighting the key factors that lead to high gender pay gaps. One key factor found that companies offering longer paid maternity leave had larger gender pay gaps. Some might use this information as a justification for keeping maternity leave times to a minimum, but Pankhurst points out that among even the childless, “structural, cultural inequalities are already in play which assume that parenting is dominated by women. There’s no reason why we couldn’t enforce paternity leave or have financial incentives to do so as in some Scandinavian countries. The results are better for everybody – for families and for businesses.” PwC has echoed this, pointing out that the UK could gain £90 bn per year if it closed the gender pay gap.
A 2016 report by the US-based National Center for Women & Information Technology (NCWIT) suggested that internal information like gender pay gap data needs to be made known to its employees and that according to them “Employees leave managers, not companies.” In a recent guide to disclosing gender pay gap data by London-based Flagship Consulting, group HR director for J Sainsbury’s plc echoes this sentiment, saying, “Fundamentally, companies need to have all-inclusive talent strategies that enable all colleagues, whatever their background, gender, ethnicity, religion, sexual orientation, or whether they have a disability, to fulfil their potential.” In the same report, neuroscientist Dr Jack Lewis explains that conversations with colleagues need to “create equity [and] be direct. Ensure transition to equality and transparency, with honesty and genuine regret. Say you are embarrassed.” A 2016 study by Robert Half Management Resources found that company data should be shared with employees on a schedule, else it “Risk[s] having employees draw their own conclusions on what is happening with the business.” This means some businesses, like Deloitte, need to start communicating with their employees now.
In 2017, Deloitte released its pay gap data to the public at 18.2% but did not include its senior equity partners in its calculations. Though not breaking its requirements legally, after public and governmental outrage over breaking the spirit of the requirements Deloitte released a statement on in which David Sproul, senior partner and chief executive of Deloitte UK, says, “We are firmly committed to transparency and achieving consistency in gender pay reporting standards. This is why we have listened to the calls for firms like ours to do more in how we report gender pay data. Our role in society means we have a responsibility to lead on critical issues such as inclusion and diversity.” Its revised data shows a 43.2% gap between its male and female colleagues. On the same day after similar pressures, EY released its updated gender gap figures to include partners at almost 20% higher than it had previously estimated.
Other companies aren’t so easily swayed by public opinion. London-based legal firm Linklaters has yet to adjust its data to account for partner earnings, even after receiving similarly bad PR. It’s an interesting gender strategy, given that Linklaters has recently been in the news after a former partner has been jailed for sexual assault. Of these key communications moments, Pankhurst says, “It will be really interesting to see if they shift and see if any others, once those have been called out. Will the others start behaving? Do they become more fearful of current opinion for not giving the data up truthfully or of current opinion for giving up awful data? Definitely, at the end of the day there will be some change as a consequence.”
For companies that have already started working internally on their gender issues, some savvy organisations may want to disclose their findings to the public soon. The inner workings of whole organisations are being put to the fire when they hide or minimise wrongdoings. If required to disclose the information anyway, being known for a thorough gender pay gap strategy may mitigate any bad PR once the data is released. This forward-thinking approach may even give some brands an edge over their competitors.
Already, best practice examples are popping up across the corporate landscape. Wavemaker, the billion-dollar media firm, is using the early release of its gender pay gap data to highlight a series of reiterative, trackable changes the firm is making to make it more equitable and diverse. Barclays, on the other hand, though reportedly paying its female employees 48% less than its male employees has done little in the way of crisis management. The bank is aiming for women to represent 33% of its board by 2020, despite having no limitations in its articles of association for its number of board members. When speaking with Communicate about why it doesn’t aim to increase the number of board members to bring it to parity by 2020, or to describe any of the reasoning behind its 33% goal, Barclays declined to comment.
Many of the 9,000 UK businesses that disclosed data will soon realise that ‘sorry’ is not enough. Pankhurst says, “I think there are going to be so many people who analyse this data that are interested in pushing for change in how they operate that what [the analysts] do with it, will be just as important as what the government does with it and what companies do with it.” Once a company has its gender pay gap data, it will have to tread carefully in how it communicates these findings with employees. The major effect that salary earnings have on people’s lives means that anticipating the reactions of employees will be a key to maintaining company morale and acquiring new talent. Businesses need to be prepared to sincerely apologise and then change their ways for good – or face the consequences of their inaction.