Five steps to address your gender pay gap in 2021

Estimated reading time: 4 minutes

The deadline for gender pay gap reporting is upon us with public sector due by 30 March, and private sector and charities due to report by 4 April 2021. With this in mind, what are the key considerations for organisations in 2021? Here are five practical actions for those taking on the challenge to reduce their gender pay gap.

1. Go beyond mandatory pay gap reporting

To make a real difference, analysis beyond mandatory gender pay gap reporting requirements is essential. Our research exposed that 64% of employers believe mandatory pay gap reporting alone provides meaningless results. As a result, 61% are looking to conduct deeper analysis.

The need for deeper gender pay gap analysis is illustrated by the concept of “intersectionality” which has quite rightly become a buzz word in recent times. It’s about understanding how aspects of a person's identity (gender, ethnicity, etc.) combine to create different modes of discrimination and privilege. Simply put, one woman is not all women. 

The ONS has pointed to a Motherhood Gap, noting there is only a marginal pay gap between full time earners under 40. However, over 40 the gap widens as men's careers typically continue to thrive whilst mothers who often move to part time, find it more difficult to progress into the top earnings quartile. ONS also highlighted older workers and higher earners as groups experiencing higher gender pay gaps.

Only deeper gender pay gap analysis, including segmentation by age, working hours, ethnicity, etc can help you truly understand your pay gap and thereby address it effectively.

2. Protect your reputation

Clients and investors are now frequently scrutinising reputational issues. We have been in discussions with a high profile business that is, quite frankly, scared that they will lose clients, as a direct result of their high gender pay gap. 

To protect your reputation, it’s critically important that you spend time on your gender pay gap narrative. A starting point is to offer explanation, not just apologies. To do that you really need to understand where within the workforce your pay gap lies and the underlying causes of it – which mandatory pay gap reporting simply won’t give you.

Overlaying your gender pay reporting with wider analysis, such as a wellbeing assessment or an employee impact storybook, will provide real insight, help with the narrative, prescribe interventions and mark you out as a thought leader.

3. Consider the real life impact of your pay gap

Stop and think for a moment about the true impact of your gender pay gap. How does low pay and the inability to progress, impact your employees in real terms?

The effect can be deep and wide ranging. We know from Scottish Widows that, as of 2020, there is a £100,000 pension savings gap between men and women based on the average savings rates on the median wage. The Government backed Money and Pension Service, through their Gender and Financial Wellbeing Challenge Group, are aiming to reduce the number of women using credit to pay for food and bills. The gender pay gap is likely to be an influencing factor in this and this financial pressure can lead some into negative debt spirals and despair. Our award winning BWell scoring and digital dashboard can analyse a workforces  “Gender Debt Gap” and wider measures of  a “Wellbeing Gap”. Understanding and addressing this can reduce an organisations cost of absence.

4. Undertake inclusive pay gap analysis

In a world where we are being encouraged to “bring your whole self to work”, it is glaring that gender pay gap calculations, omit employees who do not specify as male or female. How then is the fairness of their pay being reviewed?

Gender pay gap reporting examines potential detriment to women. However there are also men in the workplace who may not be receiving equal opportunity to progress their careers. To do the right thing, your gender pay gap analytics must be more inclusively focused around assessing whether all employees, whoever they are, are being supported to progress and perform to their full potential. 

5. Consider the effect of furlough on your pay gap

Employees not in receipt of full pay as at the “snapshot” date (31 March for public sector and 5 April for private sector and charities), will not be classed as “full pay relevant employees” for the purposes of gender pay gap reporting. This could have a material effect on the size of organisations reportable pay gaps.

"As we emerge into 2021 and seek to “build back better”, strong moral questions are being asked regarding how we value people in society. One only needs to consider the low average earnings of our so-called “key workers”, many of whom are women, to illustrate this point. Add in Black Lives Matter and a luminous spotlight is quite rightly being shone on fair pay and progression."

Melissa Blissett leads the development of Barnett Waddingham’s gender pay gap consultancy and analysis tool.