Will this be the breakthrough year for equal pay?

Appointing more women to senior roles has long been a priority for companies seeking to present themselves as inclusive places to work. Yet while the journey towards gender diversity in the corporate world has been steady – if a little plodding – progress towards pay equality has been far slower.

For those pushing the equal pay agenda, hopes are high that 2016 could prove a breakthrough year. Last summer, the government announced that companies with more than 250 employees will have to publish their gender pay gap. The regulations are expected to come into effect on October 1st, with employers having to publish the required information on a date of their choosing by April 2018.

So should businesses have anything to fear from the new reporting requirements and why do gender diversity and equality make good business sense?

Evidence suggests that far from being a box-ticking exercise, gender diversity is good for the bottom line. Research from McKinsey shows that companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry medians.

Sodexo is one foodservice company that says it has reaped the benefits of gender balance in its organisation. The company has a target for 50% of management positions to be occupied by women by 2020, which has almost been achieved five years ahead of schedule with the figure standing at 49.4% in 2015.

In 2014, Sodexo published the results of its internal gender balance research, which gathered data from 52,000 managers working in 90 entities and compared the performance of those that were gender-balanced – classed as 40-60% women in management – versus those that weren’t.

“The results were compelling,” says Meg Horsburgh, the head of diversity and inclusion at Sodexo UK & Ireland. “Over the past three consecutive years,
the gender-balanced entities were 13% more likely to record consistent organic growth and 23% more likely to show an increase in gross profit. They also performed better for employee engagement, brand image, consumer satisfaction and client retention.”

Horsburgh says the high proportion of women in management roles at Sodexo hasn’t been achieved by chance. The promotion of gender balance at all levels of its business has been a strategic objective since 2009 and Sodexo’s efforts have been validated by the Sunday Times naming it among its top 50 employers for women for the third consecutive year in 2016.

Sodexo is now turning its attention to the issue of pay where, although performing above the national average, the company still has work to do to achieve gender parity. In 2014, Sodexo conducted its first sample equal pay audit of about a third of its staff, using a number of generic jobs within a cross-section of its employee base. It revealed that the overall gender pay gap across this sample population of approximately 10,600 employees was 10.5% compared with the national average of 19.1%.

The company has since committed to publishing an overall gender pay figure this 2016, before the government requirement to do so. “We think that gender pay equality is a vital step towards a gender-balanced business and that improving transparency on this issue is crucial if businesses are collectively going to address the pay gap,” says Horsburgh.

Sodexo’s pre-emptive move will put pressure on foodservice competitors
to follow suit. And although there are likely to be nervous employers fretting about what their pay data will reveal, Jenny Lincoln, a gender research and policy officer at Business in the Community, says businesses should welcome the move towards transparency.

“Transparency will encourage employers to take action to close their gap, tackling the root causes of inequality in their organisation. It will enhance corporate reputation, increase staff’s engagement and attract new talent,” she says.

For businesses that identify disparities between pay for men and women, Lincoln says understanding what is causing the gap is crucial to tackling it. Unequal pay for doing the same job, which is unlawful, could be one reason for a disparity; another could be a higher number of female workers in part- time roles (since the hourly rate for part-time work tends to be lower than the full-time equivalent).

“A lack of women in senior roles will also be driving the gender pay gap, so employers must ensure both women and men have equal opportunities,” adds Lincoln. “This involves bias-proofing recruitment, performance and promotion processes and encouraging take up of shared parental leave.”

With data showing that girls are outperforming boys in GCSEs and more women are graduating from universities than men, the pool of female talent is becoming deeper and stronger by the year. So companies that foster a male- dominated working environment are not just doing a disservice to women, they are also actively damaging their own long-term prospects.

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