Equal Pay Day 2023: five tips for employers on closing your organisation's gender pay gap

Equal Pay Day this year fell on 22 November. This date signifies the number of extra days women must work until the end of the year in order to earn the same amount that men have earned in the same year. 

Government data shows a mean gender pay gap of 10.7% for full-time workers and 13.2% for all workers in 2023. This compares to 10.9% for full-time workers in 2022, and, at this rate of decrease, the Fawcett Society predicts that it will take until 2051 to close the gender pay gap. 

Whilst the reasons for the gender pay gap are complex and include wider cultural and societal factors, there are practical steps that employers can take to help close their gender pay gap.  

What is the gender pay gap?

The gender pay gap is the difference in average hourly pay between men and women (set out as a proportion of men’s pay). Since April 2017, employers with 250 or more employees must report on their organisation’s gender pay gap.

The gender pay gap is not the same as pay discrimination, which is illegal, and occurs when women are paid less than men for “equal work”.  Pay discrimination does unfortunately still exist and is one of many factors contributing to the gender pay gap including (but not limited to): -

• women having a greater proportion of caring responsibilities than men;
• lack of flexible work opportunities to enable women to progress to senior roles due to their caring responsibilities;
• more women working in part-time work than men which is lower paid per hour (pro-rata) than full time work; and
• a failure to promote women to senior roles due to bias.

Research shows that, for some women, their ethnicity combined with their gender produce even higher pay gaps, namely Black, Asian and other minority ethnic women. Disabled women also earn consistently less than non-disabled men, as well as disabled men and non-disabled women. Therefore, even more work is required in these areas to close the pay gap.

Five tips for employers: closing the gender pay gap

It’s not just those organisations who are legally required to report on their gender pay gap who will want to take steps to close it - it’s an important issue for organisations of all sizes, in all sectors. 

Closing your gender pay gap can: -

• result in a more diverse and productive workforce, with women represented at all levels; 
• enhance reputation and brand - consumers and clients increasingly want to know that the businesses they are dealing with are responsible, diverse and inclusive; and
• attract and retain the best talent in a competitive job market (research has shown that two thirds of women take the gender pay gap into account when applying for job roles).

Below are five practical steps that employers can take to help close their gender pay gap: 

1.Flexible working

The availability of flexible work options is crucial: to enable women with caring responsibilities to progress through your organisation and access higher paid roles. 

Whilst most workplaces now offer flexible options, employers who want to close their pay gap must continue to think proactively and creatively about how work can be done flexibly (by both women and men) whilst still meeting business needs. 

Training should be given at all levels to ensure that line managers are making the right decisions on flexible work requests (“FWR”) – in line with your organisation’s flexible work ethos. This includes educating line managers on upcoming changes to the flexible work regime, which are expected in Spring 2024. More information can be found in our blog post here.

The expected changes will broaden the scope of the flexible work regime and include making the right to make a FWR a “day one” right, shortening the length of time employers have to consider FWRs and enabling employees to make up to two FWRs each year. We expect that the eight statutory business reasons employers can cite to refuse a FWR will remain unchanged.

More information on our cost-effective line manager training on how to deal with FWR can be found here.

2. Recruitment

There are a number of changes you can consider making to your recruitment processes to support female applicants to apply for more and better paid roles.

There have been calls for the Government to legislate for an employer “advertising duty” for flexible work. This would require employers to think about how a role can be done flexibly and include flexible work options within the job advert e.g. job share, flexible hours, remote working etc. Going even further than this, if a flexible work option isn’t possible, an employer would need to justify this. 

Whilst there are no current plans for the Government to create such a duty, this shouldn’t stop your organisation from thinking about how it advertises new roles, including detailing flexible options at the outset of the recruitment process, to encourage a more diverse range of applicants, including disabled women and women with caring responsibilities. 

It’s also possible to take “positive action” to redress any under-representation of women in your workforce. Specific rules apply to recruitment and promotion and our earlier blog post on this topic explains more.

Finally, you may wish to consider stopping asking applicants about what they earned in their previous job. Asking this question and basing salary offers on previous earnings can perpetuate existing gender pay gaps. Setting your own pay bandings, independent of salary history, will help to ensure for fair and equal pay throughout your organisation. The End Salary History Guide (a joint guide by the Fawcett Society and the Recruitment & Employment Confederation) provides more guidance on the topic.

3. Take steps to prevent sexual harassment in the workplace

Preventing sexual harassment in the workplace is a further way to help close the gender pay gap.

Although sexual harassment affects both men and women, women are more likely than men to be subjected to sexual harassment in the workplace. 

Sexual harassment can: -

• impact women’s career choices – a common outcome for sexually harassed employees is to leave their employment and look for new work;
• lead to anxiety and depression, affecting women’s productivity, absence levels and career progression; and
• reinforce “organisational segregation” which contributes to the pay gap (i.e. a concentration of men or women in certain roles e.g. men working as engineers, women as typists or men in higher paid management roles).

From 26 October 2024, employers will need to comply with a new legal duty to “take reasonable steps to prevent sexual harassment” and could face increased financial penalties before the Employment Tribunal if they fail to do so. 

You can read more about the new duty in our blog post here. Taking reasonable steps to prevent sexual harassment will include: -

• having up-to-date policies on sexual harassment in place;
• regularly training all staff on diversity and inclusion (“D&I”) including sexual harassment (see point 4 below); and 
• ensuring any issues/complaints are dealt with promptly and thoroughly.

4. Carry out D&I training

Sex discrimination continues to exist. Recent research from the Young Women’s Trust found that 19% of HR professionals would be reluctant to hire a woman who they thought might go on to start a family. Only 13% said the same for a man.

Delivering regular D&I training can help to educate employees at all levels on sex discrimination, including unconscious bias, which plays a role in women being unable to access opportunities and higher paid roles. 

It can also provide important education on discrimination which leads to larger pay gaps for Black, Asian and other minority ethnic women and disabled women (as above). 

In light of the new legal duties on sexual harassment coming into force, it’s critical that your D&I training is also updated to cover sexual harassment e.g. what constitutes sexual harassment, who is protected from sexual harassment, what to do if you experience/witness this etc.

We have created two new online diversity and inclusion modules to help employers properly train staff, including in relation to sexual harassment. One module applies to all employees, and the other module focuses on line managers to help them to understand the key role they play in ensuring that the people they manage behave appropriately. 

If you'd like to know more about these, please speak to Charlotte Rees-John, Jenny Arrowsmith or Gordon Rodham.

5. Conduct a D&I assessment

Our D&I assessment is a complete review of your organisation’s people policies and processes to identify any issues and create a measurable strategy to support you in becoming a more diverse and inclusive business – including identifying any steps needed to close your gender pay gap. 

From a gender pay gap perspective, our bespoke D&I assessment would include a review of your recruitment processes and analysis of the proportion of female employees at all levels in your business (up to Board level) to understand any factors which may be contributing to any underrepresentation. Beyond this, we’ll look at all areas of D&I including the outcomes of employee surveys, exit or onboarding interviews, past grievances and claims around D&I and all policies and procedures relating to D&I.

We’ll spend time in your business with you, before creating a detailed report and helping you to formulate your D&I strategy.

For more information about our D&I assessment and how this could help to address your organisation's gender pay gap (and more), please contact Jenny Arrowsmith or Charlotte Rees-John.

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