UK Employers Fear Reputation Risks of Gender Pay Gaps

UK Employers Fear Reputation Risks of Gender Pay Gaps

Earlier this year, the UK’s gender pay gap reporting mandate came into force, obligating organizations with 250 staff or more to publish gender discrepancies in their payrolls by April 4 of next year. Some employers oppose the mandate because they say it will paint an unfair picture of their pay practices by not differentiating between group-to-group and role-to-role gaps, or between legitimate and discriminatory pay differentiation.

Few employers have reported their pay gaps yet, but already, the few revelations that have come out have led to headlines like “Financial services suffer from widest gender pay gap in UK“—not good news, but also, not exactly news. As such, British employers are concerned about the impact of this reporting on their reputations, particularly among those that do have large gender pay gaps. Personnel Today’s Adam McCulloch flags a new survey of senior professionals finding that 84 percent believed the requirements would damage organizations’ reputations and that 73 percent thought companies with large gaps would have more trouble recruiting:

The new research from public relations firm Golin also found that just over three-quarters (76%) of professionals agreed that organisations should be named and shamed for their gender pay gap and 77% felt that companies were likely to lose staff once the pay data was published. More than a third of respondents said that the issue was more toxic for companies than corporate tax avoidance and, perhaps most seriously, 39% of female respondents said they would consider leaving if their company reported a significant pay gap.

These findings are no surprise to us at CEB (now Gartner), as our latest research into pay equity finds that perceptions of pay inequality can be just as harmful to employee retention as pay inequities in fact—and the perceptions tend to be even worse than the facts.

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WEF: The World Is Backsliding on Gender Parity

WEF: The World Is Backsliding on Gender Parity

For the first time since it began keeping records in 2006, the World Economic Forum’s Global Gender Gap report registered a decline this year in gender parity around the globe. The report, which uses data from the WEF’s own surveys and from other major global organizations, measures parity along a series of metrics including political empowerment, economic participation, education, and health. Last year’s report warned that the economic gap between men and women was widening, even as overall parity was improving. This year, it finds, the economic gap is even worse, and at the current rate of progress is projected to persist for another two centuries:

At the current rate of progress, the global gender gap will take 100 years to close, compared to 83 last year. The workplace gender gap will now not be closed for 217 years, the report estimates. But with various studies linking gender parity to better economic performance, a number of countries are bucking the dismal global trend: over one-half of all 144 countries measured this year have seen their score improve in the past 12 months.

“We are moving from the era of capitalism into the era of talentism. Competitiveness on a national and on a business level will be decided more than ever before by the innovative capacity of a country or a company. Those will succeed best, who understand to integrate women as an important force into their talent pool,” said Klaus Schwab, Founder and Executive Chairman, World Economic Forum.

The top-scoring countries for gender parity across all measures are Iceland, Norway, Finland, Rwanda, and Sweden. Canada is ranked at #16 and the US at #49, a four-place decline from last year. The WEF highlights Canada and France (#11 as among the countries that have made significant gains in gender parity in the past year. However, a high place on the list doesn’t mean that a country is closing all of its gender gaps, and the economic one is proving the most stubbornly difficult to close.

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CareerBuilder: Most Candidates Don’t Negotiate Job Offers

CareerBuilder: Most Candidates Don’t Negotiate Job Offers

A new survey from CareerBuilder points to a mismatch between candidates and employers in salary negotiations—namely, that candidates often don’t think there is one:

[The survey] found that the majority of workers (56 percent) do not negotiate for better pay when they are offered a job. Those who avoid it say they don’t attempt it because they don’t feel comfortable asking for more money (51 percent), they are afraid the employer will decide not to hire them (47 percent), or they don’t want to appear greedy (36 percent).

While most job candidates avoid negotiating, the majority of employers are expecting a counteroffer. Fifty-three percent of employers say they are willing to negotiate salaries on initial job offers for entry-level workers, and 52 percent say when they first extend a job offer to an employee, they typically offer a lower salary than they’re willing to pay so there is room to negotiate. But how much money is being left on the table? More than a quarter of employers who offer a lower salary (26 percent) say their initial offer is $5,000 or more less than what they’re willing to offer.

The survey, conducted earlier this year by Harris Poll among 2,300 employers and 3,400 full-time employees, also dug up some demographic data to inform the debate over the role of the “negotiation gap” in gender and other pay gaps. It found that employees over 35 were slightly more likely to negotiate (45 percent) than the younger crowd (42 percent), and that 47 percent of men negotiated as opposed to 42 percent of women. These differences are meaningful, but CareerBuilder’s broader takeaway is that regardless of their demographics, a slight majority of candidates are just not negotiating at all. The exception is in sectors like IT, sales, and financial services, where over 50 percent of employees said they negotiated their salaries.

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UK’s Gender Pay Gap Narrows, but Wages Fail to Outpace Inflation

UK’s Gender Pay Gap Narrows, but Wages Fail to Outpace Inflation

New figures released this week from the UK’s Office for National Statistics show that real wages there fell in the year to April 2017 by 0.4 percent, the BBC reports:

The Office for National Statistics (ONS) said this was the first fall in three years. It says that although wages rose by 2.2% in the year, inflation rose by more, eroding any gains. The median – middle – amount earned was £550 a week. … The weekly income figure shows the first recorded fall since April 2014, and follows a rise in inflation in the wake of the Brexit vote in June last year.

Earnings, not adjusted for inflation, rose in 2017 by more among the lowest-paid workers. For those in the lowest 10%, full-time earnings rose by 3.5% compared with 2016.

Also, the statistics show the gender pay gap in the UK falling to its lowest level since the government began measuring it 20 years ago: 9.1 percent, down from 9.4 in 2016. That reflects the relative gains British workers made toward the bottom of the payscale, Stephen Clarke, policy analyst at the Resolution Foundation, tells Sky News:

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Study Highlights Gender Pay Gap Among Creative Freelancers

Study Highlights Gender Pay Gap Among Creative Freelancers

Fast Company’s Ben Paynter flags a study from HoneyBook, a business management and networking platform for creative entrepreneurs, which compared over 200,000 invoices submitted to clients through its platform and surveyed 3,100 users to find that women in this sector are earning about 32 percent less than their male colleagues:

The average male creative on HoneyBook makes $45,400 per year. Factor in that 32% reduction rate, and the average woman makes just $30,700 for similar services. Another issue is that many of those being underpaid may not be aware that a man doing the same job could get paid more by the vendor. Among those surveyed, the majority were sole proprietors who may be paying more attention to their business flow than standardized rates; 63% reported thinking that pay among genders was likely to be equal.

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5 Things Most Companies Don’t Realize About Pay Equity

5 Things Most Companies Don’t Realize About Pay Equity

Pay equity and pay gaps, especially the gender pay gap, have been drawing greater and greater attention in recent years, both among corporate leaders and in the media. As organizations ramp up their diversity and inclusion strategies, they are feeling a need to close these gaps to demonstrate that the organization is serious about not only hiring for diversity, but also ensuring that compensation is fair for women and minority employees.

However, the coverage of pay gaps in the popular press often misses key details about the problem that compensation leaders need to understand to face this challenge effectively. Here are five things you might not know about pay equity that will make a real difference in your ability to achieve it:

1) Pay Equity Actually Refers to Two Things

Pay equity issues in companies can come from two sources: group-to-group gaps and role-to-role gaps. These terms are often used interchangeably in the media, glossing over an important distinction between gaps among different groups of employees, where pay differences are based on something other than gender or race, and role-to-role gaps, where two employees are paid differently for doing the same job. In the first case, you may have women concentrated in lower-paying roles than men (such as female nurses and male doctors, or male principals and female teachers), which may reflect an unfair distribution of expectations and opportunities, but compensation executives can’t directly and immediately control for those factors (although they can collaborate more broadly to influence them). A role-to-role gender pay gap, on the other hand—male nurses earning more than female nurses—is something compensation leaders can and should address.

Both group-to-group and role-to-role gaps contribute to the pay equity problem as a whole, but it is important to recognize that your compensation strategy alone can’t solve them both.

2) The Problem Is Bigger Than It Looks

In the US, the gender pay gap is often reported at around 20 percent, meaning women earn about 80 cents for every dollar men earn (and women of color earn substantially less). At a large-scale global organization, CEB (now Gartner) research has found, the average gap is even wider: 27 percent. However, that doesn’t all reflect pay discrimination: 9 percent is attributable to choice of occupation; 6 percent to organizational factors like size, industry, or geography; and 5 percent to human capital factors like differences in education and experience.

The gap that remains unexplained is 7.4 percent, and that is the discrepancy that can be ascribed to no other factor than gender. This is the role-to-role gap—and that’s the part that rewards professionals can actually fix. HR owns this gap has an obligation to close it before it becomes a serious problem for the organization.

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California Bill Would Require Large Companies to Report Gender Pay Gaps

California Bill Would Require Large Companies to Report Gender Pay Gaps

Last month, the White House Office of Management and Budget announced that it was putting on hold a rule proposed by the Obama administration in 2016 that would have required organizations with more than 100 employees to submit summary pay data to the Equal Employment Opportunity Commission each year showing what employees of each gender, race, and ethnicity earn. This reversal relieves employers of what opponents say are overly burdensome and costly regulations that would do nothing to address pay gaps.

For large employers in California, however, that relief may be short-lived. At the firm’s blog about California employment law, Seyfarth Shaw attorneys point to a piece of legislation that went to Governor Jerry Brown’s desk this week that would “require companies with at least 500 employees to compute differences between the wages of male and female exempt employees and board members located in California and file the report with the California Secretary of State,” which would then publish this information for public view:

If the bill is signed by Gov. Brown, beginning on July 1, 2019, and biennially thereafter, impacted employers will have to collect and compute:

  • The difference between the wages of male and female exempt employees in California using both the mean and median wages in each job classification or title.
  • The difference between the mean and median wages of male board members and female board members located in California.
  • The number of employees used for these determinations.

This information would then be reported to the California SOS by January 1, 2020 (and biennially thereafter) on a form categorized consistent with Labor Code Section 1197.5—the California Fair Pay Act (“FPA”).

The bill, they add, does not establish that a gender wage gap in this information is a violation of the Fair Pay Act, but opponents claim it would not need to, as it “effectively forces employers to hand over to potential plaintiffs all information they might need to file a lawsuit, without any context that would explain permissible differentials.”

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