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07 Sep 2023

5 practical tips on how you can close employee pay gaps

If you are struggling to make any significant reduction in your gender or ethnicity pay gaps, you are not alone

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Are you struggling to make any significant reduction in your gender or ethnicity pay gaps?

If so, you are not alone – many clients that Barnett Waddingham has helped through its gender pay gap data analysis are similarly struggling. So, is there a better approach? And what’s not working? Here are six points to consider.

1. Link to business strategy

Too often, pay gap analysis and action planning gets pushed down the agenda by other business priorities. Linking it to key business strategy – such as ESG metrics, sustainability and corporate governance – may lead to more resources and a higher priority being given to the issue.

2. Take a data-led approach

Best practice does not always reflect the issues that are driving the pay gap in your organisation. Taking a data-led approach by conducting deeper data analysis will mean you can focus on the key drivers. These can be presented to your management board to make it clearer why you need to take any proposed actions and what impact the result is likely to have on your pay gap reporting figures.

3. Seek out employee insight

Women and ethnically diverse colleagues are likely to hold many of the answers to blocks to their career and best practice, which would help them succeed, pertinent to your own workplace. Male opinion is also important, particularly from an allyship perspective.

4 Make use of research you already have

There is a lot of research and experience from those working with organisations to close pay gaps, spotlighting the many common themes. Check if your organisation identifies with these and then lean on this research and recommended action planning. For example:

  • Fawcett
  • Gov Gender Pay Gap Service
  • CIPD
  • Lean In

5. Identify the effect of the pay gap

Reducing the pay gap isn’t just a numbers puzzle. Understanding that people are affected can help achieve the motivation to create change.

For example, the pay gap is a key factor in the pension gap – this is not only a personal impact but could impact an organisation’s succession planning, if employees can’t afford to retire.

As the cost-of-living crisis continues, it’s important to understand any impact of the pay gap alongside how financial pressures can be affecting employees and the organisation. Conducting a financial wellbeing survey that you can disaggregate by gender, ethnicity and other factors could help inform employee benefits and other employee support decisions.

These steps aren’t an exhaustive list, but are great places to start when you are looking to address your pay gaps. All efforts should also be backed by reviews of any interventions and, where possible, quantifying any impact on the pay gap.

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