Are You Prepared for Your Customers to See All?
6 October, 2017
From publishing Gender Pay Gaps to the Women in Finance Charter organisations in the UK are now faced with the prospect of sharing information publicly they wouldn’t usually disclose. The impact of this increased transparency can be far-reaching as it will highlight a company’s attitude towards inequality as well as their approach to addressing it for the future.
How will transparency impact your organisation? – Four key areas to consider
I’m sure there were many across the UK wincing when they saw the headlines about the BBC and the level of pay inequality. The impact on their reputation as a service provider and as an employer has certainly taken a hit and one that may be difficult to move on from, unless they take focused action. The BBC has since committed to closing the gap by 2020 after an unprecedented intervention by 40 of its most high-profile female stars.
2, Employee attraction, engagement and retention
People who were aspiring to start or progress their career within the BBC may think twice before applying for a role there, or certainly challenge within the interview process around pay and what they are doing to change the current state. Organisations may find it more challenging to attract new talent as well as difficult to retain the talented people they already have if they feel that they have not been valued and rewarded appropriately.
3, Financial risk
With increased transparency on aspects such as pay comes the increased risk of employee claims for equal pay, which could go back over six years. Equal pay claims could well be on the increase if employees feel aggrieved enough to take this forward.
4, Procurement process
Increasingly organisations are asked about their stance of Equal Opportunities, Diversity and Inclusion during the procurement process. This is usually remedied by sharing a policy that states their stance. However, increased transparency will enable organisations to challenge the policy, ask where progress is not being made and what they are doing to remedy the shortcomings of their current activity.
So, what should companies do? Six actions organisations should take
It’s anticipated that the majority of organisations will not be where they either want to be or feel comfortable publicly stating where they are on the gender pay gap. With this level of transparency there is no place to hide, the data is presented in a stark manner on the Government website. There is also a very limited timeframe to hide behind great gestures and actions that may not give the results expected, or anticipated, further down the line.
1, Create the clear case for change
Many organisations continue to get hung up on the business case for creating a more diverse and inclusive workforce. There is a whole swath of data and evidence to reinforce the impact diverse and inclusive teams can have on productivity, innovation and collaboration. If you’re looking for the burning platform as to why this is important now given every other priority, increased transparency is certainly an important one.
2, Be honest and direct – no spin
The data will speak for itself. Organisations will have the opportunity within their own website and communications to share a ‘narrative’, an overview of why their gender pay gap is as it is. Be honest, if the results are not what you would like them to be then say that but don’t make excuses. If you policies and processes have not been effective enough to remove inequality then state that and move on to articulating what your plan is to change this.
3, Create a realistic, yet challenging plan
You can’t change what has historically happened but you can create a plan that will remove the current problem. Focus on creating an effective and realistic action plan that will get to the route cause of the issue. For example, if your practice is to negotiate starting salaries this may have a detrimental impact on the starting salaries of women compared to men – review the data to see what it’s telling you.
4, Create measures you can monitor internally
Every action plan requires a way to measure the impact - this is no different. Once a plan has been created, focus on the measures you will be able to put in place to review the effectiveness. For example, is there increased parity in the starting salaries of people joining the organisation at specific levels? If not, why not? These progress measures do not have to be made public and will give you a good indication as to the progress being made and the impact on the gender pay gap data you will have to share the following year.
5, Get others across the company involved
Creating the change needed with increased transparency is not the sole responsibility of Senior Leadership or the HR function; this is the responsibility of everyone within the organisation. Consider how you will communicate the available data to your employees, share the action plan, ask for their input and discuss the role they play in helping to shift the culture to one that is more transparent and more inclusive.
6, This is more than gender
Although the current focus on transparency is around gender, this shouldn’t stop organisations considering this from other aspects such as ethnicity or disability. I predict this is the first step on increasing transparency and advances will be made over the coming years to broaden that further – just as PwC has recently published their ethnicity pay gap. If you are currently unable to collate the data for other characteristics start to create a plan of how you will be able to do this in the future.
Ideally the data shouldn’t really tell leaders anything they don’t already see, feel and know about their organisation. If it does come as a revelation, I wonder how effective they are as a leader, they just may not have their finger on the pulse. Increasing transparency is a positive step forward to creating those diverse and inclusive workplaces that so many talk about and so many aspire to achieve.