Reward insight
Gender pay gap reporting will empower HR
Geoff Pearce, managing consultant – reward at NGA Human Resources, reveals the opportunity for HR to take on a more strategic role
M uch has been said about become more strategically involved in their organisations. From being able to analyse trends of employee turnover to managing resourcing levels against business needs, HR managers can contribute much more to a company than just looking after recruitment and employee development. However, we rarely talk about the specific opportunities that allow HR professionals to step up. Fortunately, a change has recently come into force which presents HR teams with exactly such an opportunity: gender pay gap reporting. First and foremost, there is the practical element of analysing the data and identifying whether a company has a gender pay gap and, if so, how large it is. Research has found that 23 per cent of UK businesses are not yet ready to report their pay differential in the required timeframe, but it is not too late to change this and comply. HR professionals can take the lead and proactively advise the ‘c-suite’ (e.g. chief executive officer) on what their firm needs to put in place. For example, they might need new software that allows them to easily access pay gap data without having to do the research and calculations manually. Once the necessary systems are put in place, HR teams will be able to complete gender pay gap reporting and make sure the firm complies with the legislation ahead of the deadline. Once a good process is in place, HR managers have the opportunity to educate the c-suite on the importance of taking gender pay gap reporting and its results seriously. Despite the UK pay gap sitting at 13.9 per cent (http://bit.ly/2wARdJ2), how data is enabling human resources (HR) teams to
29 per cent of leaders do not see it as an issue for their business. With members of the c-suite unlikely aware of what the day- to-day hiring process is like and what might be affecting candidates’ willingness to apply for positions, HR professionals should proactively advise the senior leadership team on the front-line situation. Using this knowledge and experience, HR managers can educate the c-suite on the true impact of a negative gender pay gap and why they should pay attention to it.
address them. Recent research found that executives think the main causes of the pay gap are women’s greater likelihood of taking career breaks (49 per cent) and working part time (42 per cent). But are these the real reasons for a company’s gender pay gap? HR leaders have the ability to confirm or challenge such assumptions by analysing and providing insight into the data they hold. With these insights, HR managers will be able to advise their organisation on how it can address its pay gap in a way that targets the specific causes in the firm. For example, if a pay gap is found to be due to women being more likely to take career breaks, firms could offer strong return-to- work programmes. If the issue is a lack of women in leadership roles the company could set up mentoring and education initiatives to help inspire both women who currently work for the firm and girls coming through the education system to reach the top. The onus of identifying the root causes of the gender pay gap in any organisation is with the HR team, which then must liaise directly with senior management and other stakeholders in the company on how to address these issues. Mandatory reporting is the first step towards firms recognising gender pay gaps as an issue and working towards pay parity. However, it is also a great chance for HR professionals to put into practice their growing strategic role and advise the c-suite on how to manage remuneration across the organisation. By using gender pay gap reporting as a chance to offer advice to the c-suite, HR professionals can cement their position as a trusted strategic advisor for businesses when it comes to people-related issues. Q
...specific opportunities that allow HR professionals to step up
Whilst the biggest concern amongst business leaders surveyed about the pay gap reporting is bad publicity (40 per cent) followed by damage to the employer brand (34 per cent), there could be internal issues, too. If women discover a pay gap at their firm, employee motivation might slump whilst staff could consider moving on. This could cause issues for the bottom line if employee numbers sink with few professionals willing to replace them. As such, HR professionals can provide strategic value to the business by identifying any of these potential pitfalls and working with senior managers to tackle them before they become an issue. With reporting finalised and the c-suite more aware of a pay gap’s impact, HR professionals are in the best possible position to identify the specific causes of pay disparity and help the company
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Issue 34 | October 2017
| Professional in Payroll, Pensions and Reward |
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