Why SMEs Should Keep a Watchful Eye on the Gender Pay Gap

18/04/18

In April 2018 companies which employ a workforce of 250 employees face the deadline to publish their gender pay gap calculations. This is designed to shine a light on the workplace culture within larger companies, and to reveal disparities that may be undermining the progress of some sections of the workplace.

SMEs don’t have to report their gender pay gap calculations – but does this mean they are off the hook?

Andrea Wallbank, HR Manager and Consultant at Business in Focus, the specialist business support organisation, says no. The analysis of pay and any gender pay gap provides a company with vital indicators about whether it is being fair, and whether it is providing an environment which enables both women and men to access all the jobs in its organisation, and to progress to the highest levels. So it is very much in a company’s interests to take this opportunity to carry out their own analysis, even though it may not be under a legal obligation to do so.

It is wise for any business to drill down into its practices and culture, and to question whether it is creating an environment that enables it to make the very best use of the whole pool of talent available – both women and men. So, it’s not just about legalities, or about fairness; it is about common sense and sound commercial practice.

The gender pay gap may simply be about whether people in a company are being paid equal pay for equal work – and there is a long history behind why there has been a difference between genders, dating back to the days when it was considered OK for women to be paid less as they were not likely to be the breadwinner. Of course, this argument doesn’t hold water in today’s society.

But there are more subtle reasons why average pay for women and men in an organisation may be different. These are harder to spot, but addressing the underlying reasons is sound business practice.

They include:

• Unconscious bias – this influences who we recruit and who we promote, if we aren’t very careful to ensure we have an objective process and sound policies and procedures in place to safeguard against unconscious bias. The Equality Act prohibits discrimination against staff or interviewees based upon their age, disability, gender re-assignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. It is wise for employers to examine their selection process if, for example, they are considering someone for a new position or for a promotion. Are they overlooking good candidates based upon faulty reasoning and subtle bias?
• Expected working patterns – are we challenging ourselves sufficiently on whether we really need people to work 9 to 5, or do we have the capacity, if we manage it carefully, to allow people to work more flexibly. We know that people with caring responsibilities, who are very often women, may need to work more flexibly, or to have different hours of work from the norm. A good approach to flexible working which is accessible to all employees and is assessed based on an objective business case means that employers are less likely to unknowingly bar people from jobs and promotions which otherwise they may not be able to fulfil.
• Unwillingness to negotiate – it may be the case that some members of staff are not comfortable with asking for a pay rise or a promotion and aren’t used to making reasonable demands and expecting them to be met. So you may, as an employer, have overlooked their talents. Similarly, these members of staff may also be overlooked when it comes to training, so they don’t have the tools they need to progress within the company. This is a catch 22 situation which needs to be guarded against.

At Business in Focus we have been working hard over the last couple of years to build our teams to deliver our business support contracts and services, and to grow our commercial accommodation business. We have found that, in order to fill our vacancies in a very competitive labour market, it has been in our interests to be more creative about how we approach recruitment and what working conditions and packages we offer our employees. For example, we offer flexible working arrangements, and not on the basis of gender – 45 percent of our part-time workers are male. Business in Focus has also retained the C2E Equality Standard Gold Status for the fifth year running and I am pleased to say we have shattered the glass ceiling – 77% of our line managers are women, as is the CEO of the company!

We know that many of our clients – the businesses whom we support to grow and succeed – are taking similar steps.

Our own experience, and that of our clients, clearly tells us that fair and objective working practices are aligned with sensible, effective business practice. Good treatment simply makes good sense.

Of course, our HR advisors are on hand to provide clear and meaningful guidance on all aspects of employment law and HR management – both to businesses who have existing contracts with Business in Focus and to others who need external HR support.

Business in Focus is the specialist business support organisation in Wales, with a team of 100 personnel delivering advice and support to businesses, and providing accommodation to people starting and growing a business.

For tailored HR advice, contact our specialist advisors here.