HR 20 July 2017

What do gender pay gap reporting rules mean for small businesses?

The BBC has made headlines for gender pay disparity as well as the huge amounts it pays some stars
The BBC has made headlines for gender pay disparity as well as the vast amounts it pays some stars

With gender pay filling the headlines recently, including Google’s discrimination allegations and the BBC revealing huge discrepancies in male and female wages, it is not an issue which is going to, or should, disappear, writes HR expert at Pytronot, Gideon Schulman.

In Apri this year, the government announced that larger UK businesses will have to submit reports in line with The Equality Act 2010  gender pay gap Information regulations of 2017. These reports must detail the gender pay gaps present in their company, with the first figures having to be published in April 2018.

While the spotlight is falling firmly on larger enterprises – the BBC and Google being the most high profile organisations currently under scrutiny – it’s important that smaller business owners are aware of the measures they need to take to tackle gender pay gap inequality in the workplace.

While the government has specified “any organisation that has 250 or more employees must publish and report specific figures about their gender pay gap”, companies of all sizes, including micro firms, can take steps to close the gap too.

Companies falling short of the 250 employee mark, or those with imminent expansion plans, should be particularly attentive, as they will likely be required to submit pay gap reports in the near future. Taking a proactive approach will only act to benefit smaller companies, putting them on the front foot and making the entire process far easier in the long run.

Although small businesses will not currently be reporting their gender pay gap, it’s important to recognise that the majority face a unique set of problems when it comes to closing this gap between men and women in the workplace.

Today, there is undoubtedly a larger impact of parental leave costs, while there are also challenges in implementing flexible working options. On top of this, there are often limited data collection systems in place in smaller enterprises, with restricted human resource support.

Nevertheless, there are a number of steps small businesses can put in place to ensure employees are systematically equal, whether that concerns work flexibility, training, recruitment or promotion opportunities.

(1) Develop an understanding of the main issues

Ensure you clarify the reasons why pay equity is important for your business and commit to addressing these issues. Although doing so is not yet a legal requirement, countless studies have shown that gender equality in the workplace leads to improved productivity and performance.

(2) Review the data

Obtain a list of all your employees and their salaries in a spreadsheet, arrange these in order of remuneration amounts, compare those who are in similar roles and identify where the differences lie. Focus on determining the reasons for any gender biases, investigating the biggest discrepancies first.

(3) Take action

Whatever the size of your company, it’s vital that management takes ownership of investigating a gender pay gap. You should then make the executive decision, in line with your business strategy and budget, how and when these gaps will be rectified.

While the focus primarily lies on larger businesses, simply ignoring the gender pay gap will carry a distinct risk for small businesses. Ensuring policies and reviews are implemented now will mean any systematic inequality can be tackled head on and won’t pose a problem if laws for small businesses are eventually introduced.

This will not only improve a business’ performance, but will undoubtedly strengthen the workforce and, ultimately, the economy. For company owners lacking the internal support required to implement these measures, seeking professional guidance can ensure businesses are given objective help. Here are some measures must be taken to avoid the continuation of deeply-engrained, but often unconscious, gender discrimination.

Proactively try to limit the influence of unconscious and conscious biases in the interview stages and compensation process by training managers and salary decision makers and try to understand unconscious bias.

Owners and managers should create awareness of the gender pay gap issue, and get organisations to support and encourage women to progress and ask for promotions where available. Reward packages should be reviewed in terms of parental leave, flexible working and having access to high quality childcare help for both men and women at work and at home.

Challenge and encourage female employees about stereotypes and ensure they are not suppressed or less valuable in an organisation because of responsibilities outside of the workplace – they categorically should not assume a lower salary because of this.

The gender pay gap reporting will unquestionably make larger employers think twice about deep-rooted gender bias and will likely mean smaller enterprises follow suit in the months and years to come.

Gideon Schulman is an HR expert at Pytronot, a payroll solutions and HR consultancy services firm.

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