Understanding the Equality Pay Gap
The CIPD’s 2024 Pay Performance and Transparency report revealed that 17 per cent of organisations within the scope of the UK gender pay gap reporting regulations had not conducted any analysis between October 2022 – October 2023.
With the upcoming deadlines for the 2023-2024 gender pay gap reporting being 30 March for public sector employers and 4 April for private sector firms, the report also revealed that public sectors were more likely to have analysed ethnicity pay gaps. The introduction of the new EU Pay Transparency Directive will place even greater pressure on employers.
Organisations will need to balance transparency in the work environment with confidentiality when it comes to salary information. This can only be achieved by monitoring the data. Audits are not just a data collection exercise to calculate your gender pay gap – they involve a commitment to put right any unfair pay inequalities.
What Could We Do to Improve Diversity, Equity and Inclusion?
Almost half of available leadership appointments in the FTSE 350 need to go to women to meet the 40 per cent of women in leadership target by the end of 2025. The FTSE Women Leaders Review focuses on increasing female representation on boards and leadership teams of the UK’s largest listed and private companies.
Among the 50 largest private companies, progress is lagging. Women hold 36 per cent of leadership roles and 31 per cent of board positions. This is in spite of the target set for 2020 – of 33 per cent female representation at board level. The UK has also fallen from 13th place to 17th place on PwC’s Women at Work index, monitoring the track record of countries’ gender pay gap. The UK widened the gap from 14.3 per cent in 2021 to 14.5 per cent in 2022.
What is the Business Case for Diversity?
Whilst in 2017 there were 54 all-male executive committees in the FTSE 350, this has reduced to nine. This signals the commitment to reducing the gap and has been welcomed as beneficial by all organisations who understand the benefit of diversity of thought and experience.
Diversity and inclusion are at the heart of business growth plans for many. Recent figures from McKinsey show companies in the top quartile of ethnic representation showed a 39 per cent better chance of outperformance in contrast to those in the bottom quartile. Companies with an executive team representation of women exceeding 30 per cent are significantly more likely to outperform those with 30 per cent or fewer.
Upskilling Existing Talent
A variety of experiences can help build a strong workplace culture. Culturally diverse teams are also culturally aware teams, crucial for making genuine connections with customers around the world. Therefore, ensuring that diverse teams are cultivated through recruitment and retention practices is key.
A diverse pipeline of talent is crucial to future-proofing businesses. Skills strategies can align with the existing learning, content or talent strategies followed by an organisation. Upskilling current employees can ensure that everyone has the opportunity to map out their journey to leadership, with different demographics equipped and given the ability through learning and development to access these roles.
