Closing the gender pay gap makes good business sense

23rd February 2016

Last week the Government issued a second consultation and draft regulations which will require large employers to publish gender pay gap statistics about their workforce.

The new legislation will affect large private and voluntary sector employers (those with 250 employees or more) in Great Britain, with calculations expected to commence in April 2017. Companies will then have to publish their first set of statistics 12 months later.

It’s the latest government initiative to tackle gender inequality and create a more agile and flexible workforce – but while many employers may view the changes as another regulatory headache, closing the gender pay gap actually makes good business sense says employment law specialist Amanda Okill.

“Companies have had to take on board a number of changes, such as the extension of flexible working and shared parental leave, so they can be forgiven for feeling exasperated at the prospect of yet more compliance,” says Amanda, an Associate at leading south east law firm Furley Page. “But legal requirements aside, closing the gender pay gap can have major benefits.

“The Office for National Statistics reported that, in April 2015, the gender pay gap based on median earnings for full-time employees decreased to 9.4% from 9.6% in 2014. This is the lowest since the survey began in 1997, although the gap has changed relatively little in recent years,” says Amanda, who is also an Associate of the Chartered Institute of Personnel and Development and can advise organisations on human resources issues.

“The Government Equalities Office report Trailblazing Transparency: report on closing the gender pay gap, published last week, highlights that, at the start of a person’s career, the gender pay gap is minimal. However, after the birth of her first child, a woman’s pay drops to almost half that of men and never recovers to the same rate as men’s, even after 30 years.

“Yet according to McKinsey’s Women Matter research, set out in the report, there’s a clear link between diversity and positive organisational performance in many key aspects,” adds Amanda.

“Attracting a larger pool of talent is one clear advantage, since highly qualified women may be more likely to want to work for a company that offers them equal opportunities, irrespective of their gender.

“The research also suggests that diversity can strengthen customer orientation. Don’t forget, women and minority groups are key consumer decision makers, with women making 80% of consumer purchases in the UK.

“Diversity can also increase employee satisfaction, says the research, by decreasing conflicts between groups and improving collaboration and loyalty; can improve decision making by fostering innovation through a greater variety of approaches; and, last but not least, it can enhance the company’s image and brand,” says Amanda.

“So perhaps the question is not so much whether organisations will be forced into yet more compliance but whether gender pay is something they can afford to ignore?”

If you would like further advice on understanding and preparing for gender pay gap reporting, contact Amanda Okill on 01227 763939.

Amanda Okill is a member of Furley Page’s highly regarded employment law team, which is ranked by independent law guides Chambers UK and The Legal 500. Amanda is personally recognised by Chambers UK as ‘an Associate to watch’.

Notes to editors
Amanda Okill

Amanda specialises in all aspects of employment legislation, employee relations and dispute resolution. She provides strategic advice primarily on UK employment law to a diverse client base including private limited companies, international companies, educational establishments, charities and individuals. She is also an Associate of the CIPD (Chartered Institute of Personnel and Development), having obtained an advanced certificate in human resources, and advises on human resource issues affecting organisations.

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