Three compelling messages your board must give on pay equality – and how to deliver them
For 50 years, employees in the UK and across the EU have had the right to equal pay for equal work. Yet, two years ago few UK companies were able to state in their first gender pay gap disclosures that they were confident on equal pay in the UK – never mind other global markets.
1. We have equal pay – globally
Equal pay is an imperative. It is a legal obligation. Governments around the world are reinforcing it with additional requirements – France, Spain, Portugal and Switzerland are recent examples.
As a result, we are seeing reward professionals reviewing pay structures, processes, manager training and governance on a local market basis, and increasingly on a global basis. This is allowing boards to include clearer statements on fair pay, if not equal pay, and to echo this message in other employee communications:
“We take specific steps to ensure that employees are paid equally for doing the same job …. We have formalised this commitment to Equal Pay for the first time in our Fair Pay Report.” Barclays (2018 Annual Report and Fair Pay Report)
“We are confident that we pay our employees fairly and keep our HR policies and processes under review to ensure we do so.” Royal Bank of Scotland (page 68, 2019 Annual Report)
2. We offer real living wage – globally
The new CEO pay ratio disclosures highlight another dimension to pay equity – the huge gaps between the highest paid and lowest paid. In employee focus groups, time and again we hear employees talking not about their own pay but about senior pay and low pay. It matters to employees.
Companies are following the lead set by Unilever and Standard Chartered, and most recently Vodafone, articulating what fair pay means to them through formal fair pay principles that apply across the organisation.
In each of these three examples, the guidelines contain a commitment to pay a living wage in each market so that every employee can have a decent living standard. Each is working with the Fair Wage Network to deliver this.
Fair pay at Vodafone, Principle 3: Ensure a good standard of living “We work with the independent organisation, Fair Wage Network, to assess how our pay compares to the Living Age in each of our markets, as we are committed to proving a good standard of living for our people and their family.”
These principles tend to be included in annual reports. More importantly, they are clearly visible to prospective employees on the company’s careers pages.
3. We provide inclusive benefits – globally
This is the newest area of regulatory development and a challenge for employers in terms of pay equality. Employers offer many benefit programmes to employees across their different markets, but can they/do they support employees equally through life events – think paternity vs maternity, starting a family for LGBT+ employees, minimum or maximum age requirements.
Over the last year, we have seen companies in the UK, such as Aviva and Diageo, launch new parental leave policies which recognise that employees – regardless of gender – want to spend time with their children, moving beyond new UK and EU provisions. And just a few weeks ago, Molson Coors announced a new life leave policy that recognises employees may need to take time away from work for reasons that are not connected with having a family.
“Molson Coors employees will be able to use Life Leave on top of their existing holiday entitlement and all other leave policies, including sickness and compassionate absence. Life Leave can be used for the significant moments in life and could be anything from taking time to settle in a new puppy at home, moving house, studying for exams, or the days leading up to a wedding.” Molson Coors, July 2019
To date, these more inclusive policies have tended to be launched market by market, with global employers exploring how they can operate worldwide as far as possible.
The author is Tamsin Sridhara, senior director and global lead fair pay, Willis Towers Watson.
This article is provided by Willis Towers Watson.
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