How to prevent parenthood creating gender pay gaps

There is a list of reasons why women tend to suffer from a pay gap – here are some tips for closing it

Mothers with two children take home 26% less income than women without children, a new report from the Fawcett Society reveals.

Meanwhile, fathers are paid 22% more.

Other life events also disproportionately effect women in the workplace – caring for elderly relatives, the menopause, and, potentially, domestic abuse or divorce.

While most employers have adopted flexible or hybrid working, which are essential to enabling women to work, there are other ways of reducing the gender pay gap.

Use employee benefits to support life events

Female friendly benefits include fertility help, menopause support and care concierge services. Going beyond childcare vouchers and offering workplace childcare or funding is a hot topic as more nurseries close or costs increase. Supporting and retaining women is essential for employers not to go backwards on the gender pay gap.

Another potential avenue is adjusting pension policy to reduce the gender pension gap:

Move away from a tiered contribution structure, biased to those with higher affordability.
Pay employer contributions on pre-maternity salary for longer during maternity leave and on return to work.
Implement auto-escalation.

It’s also often important for women to work for an organisation that shares their value set, so updating benefit packages to incorporate, for example, sustainability objectives can be powerful for talent management.

Benefits and policies should be looked at together. Career breaks (increasingly with paid leave), means resignation isn’t the only option for a woman who needs time out to manage life events. Two other policies to consider are:

End salary history delinks pay from previous salary to prevent low pay perpetuating.
Pay transparency, which can range from publishing the pay scale for each role through to full pay transparency of individual pay.

Change culture and practice

Career progression is the golden key to closing the gender pay gap. Get to the bottom of hidden practices such as how clients are allocated, how technical and administrative work is allocated, how special projects needed to gain promotion are awarded and how part-time workers can compete with full time colleagues for promotion, so careers are not flat lined.

Kerry Watson, Head of People Operations at River Island, says: “We genuinely care about those important life moments. Enabling all employees to balance their career with life outside work, reduce the financial burden of parenthood and enhance wellbeing, is crucial to our success. We have reviewed key policies to demonstrate our commitment the diverse range of modern families, including single parent families, same sex couples and career women.”

“Last year, we launched our Family Hub, introducing new family policies such as enhanced pay for maternity, paternity and adoption. We have also implemented guidelines for paid time off during fertility treatment and introduced paid time off for baby loss at any stage of pregnancy.”

“Regardless of the statutory differences in UK and Ireland, our policies apply across the business so that all our employees can benefit from the enhanced family support.”

Use data analytics to reveal bias

Employers need to understand the drivers of their gender pay gap – without doing so, attempts to change it may have little or no impact. Metrics such as the number of women progressing between grades can highlight underlying blockers and employee insight can often provide the explanation.

The Barnett Waddingham approach of deeper data analysis, beyond pay gap reporting metrics, identifies where organisations’ pay gaps are, so their action can be more effective. These include:

Home workers – indicative of visibility issues;
Those in less measurable roles – indicative of bias in performance assessment;
Specific business areas or cost centres – particularly international divisions;
Longer tenures – which can reflect ‘pigeon holing’, lack of support to progress or pay gap drag;
Higher jobs grades – indicating successful women could still not be rewarded fairly; and
New joiners – can be reflective of women being inducted on the lower end of an earnings range.

For help tackling your gender pay gap more effectively, contact Melissa Blissett or [email protected].