CMI chief hails political push on gender pay gaps

10 March 2015 -

Lib Dem and Labour MPs tipped to drive through mandatory reporting, after a mere five companies volunteer details of salary differences between male and female staff

Jermaine Haughton

New legislation requiring all large, UK firms to publish details of pay disparities between male and female staff would be a “great leap forward in achieving equality at work”, according to Chartered Management Institute (CMI) chief executive Ann Francke.

On average, British working women now earn almost 9.4% less than their male peers for doing exactly the same jobs: a record for the UK gender pay gap. The new law – introduced by Lib Dems over the past weekend to the pending Small Business, Enterprise and Employment Bill – would make companies with more than 250 workers liable for fines of up to £5,000 if they refuse to reveal their wage disparities. If it picks up Labour support and passes the second chamber, as is widely expected, the clause would come into effect within the next 12 months.

Writing in the Daily Telegraph, Francke said the law’s implementation would herald a great achievement for equality campaigners. “In the 21st century,” she argued, “transparency is the most powerful driver we have for achieving business and social change. So the news that companies with more than 250 employees will have to publish data on how they pay men and women could be just what’s needed to finally close the gender pay gap. It’s a great leap forward in achieving equality at work. And it should be claimed as a victory for all those – myself included – who have long-campaigned for it.”

Francke added: “aside from the prospect of being paid more (victory cheer), businesses will have to get real about making it easier for more women to work and progress in their careers. What’s more, having data and information readily available will provide women with the evidence they need to kick-start serious pay discussions. Of course, even armed with the hard facts, it can still be nerve-wracking to raise a question of pay with your employer. But with large companies required to publish aggregate numbers, women will at least have a reference point to begin such conversations with their managers – and the company should have the data to give clear answers, too. No more bluster – there will be nowhere for businesses to hide (this is a good thing).”

Recent efforts to spur companies into action on the issue of gender pay gaps have stemmed largely from the Coalition’s Think, Act, Report scheme. Launched in September 2011, the initiative aimed to encourage big UK firms to volunteer details of their pay structures. But despite 200 companies signing up, just five have published relevant details of their own accord: Tesco, Friends Life, PwC, AstraZeneca and Genesis Housing.

Francke explained: “To put it simply: for every pound a man in Britain earns, on average a woman will still only receive 80 pence. We work ‘for free’ for 57 days each year. The reasons behind the disparity in gender pay are numerous and well documented. Some of the issues are complex but the problems really aren’t intractable. There have been various voluntary attempts by businesses to close the gap, which have had limited success at best. The [new] legislation will now force the hand of businesses to act and find solutions to the problem. As the saying goes: ‘What gets measured gets managed’. And what gets published gets managed even better.”

The CMI chief outlined three ways in which bosses must handle the wave of change that the new rules would naturally demand:

1. Data

Businesses must use pay audits to collate information on wage gaps, and demonstrate through consistent metrics that they are closing them.

2. Recruitment

Women should be given impetus to negotiate for higher starting salaries through the use of transparent hiring processes. That could mean using diverse selection panels, and tapping into even more diverse talent pools.

3. Culture change

Businesses must make the workplace more female friendly by providing flexible working arrangements, greater support for those caring for children or relatives, and for senior managers to take a more active role in mentoring.

Are you female worker in the media industry? If so, CMI and Women in Journalism want to find out about what impact your gender has had on your career progression. Click here to take part in a short, five-minute survey.