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Addressing the gender pay gap: employer methods

This report presents the findings of 14 interviews with employers in the private and public sector.

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5. Benefits and Challenges of Engaging with the Gender Pay Gap

The employers in the sample identified a range of benefits associated with their policies to close the pay gap, while also highlighting potential barriers and challenges in relation to their efforts. Several benefits have been touched on already within the report, and include the development of internal transparency, raising the profile of gender equality and the development of more agile, modern working arrangements.

Key benefits included the potential to increase diversity in decision making roles, make organizations more accessible to a wider range of talent, retain high performing staff and contribute to ongoing conversations about diversity within the business. The primary challenges raised by employers concerned the potentially long timescale involved in closing the pay gap and the importance of factors over which employers had limited control, including the external influences on occupational segregation, social expectations around childcare responsibilities and the availability of affordable childcare.

Benefits

Increased Diversity

Participants indicated that promoting gender diversity offered a number of important benefits to employers. Amiqus offered a useful summary of the benefits of diversity in this regard, emphasizing both workplace benefits and an increased capacity for innovative thinking:

It's proven…I think it was a McKinsey study…a lot more productivity, a happier workforce. There's so many benefits from having a diverse workforce…For me, we as a company are looking to grow. We work in tech. We are looking at fresh ideas, how we make products, and we want people who have different ways of looking at things, we don't want everyone to be the same. (Head of People. Amiqus Resolution Ltd, Digital Legal Services, 11-50 employees)

The notion that a broader range of people and backgrounds could potentially improve company performance was also emphasized by STV, who linked this specifically with the creativity that was central to their business:

As a creative business, we understand that increased diversity drives innovative thinking to better represent and reflect the different needs of our consumers. (HR Manager, STV, Broadcast Media, 501-1000 employees)

A particularly interesting example of this was described by Standard Life Aberdeen. This employer had found that, by introducing a returners program for women that had taken career breaks in relation to maternity, they benefitted from bringing in returners whose career experiences differed from those recruited through more typical approaches. As they reflected:

We've seen a real ripple effect of bringing in a few women at a stage where they have a very different life experience or a very different career path into roles previously filled by internal progression or external hires through traditional routes. It definitely has had a positive effect across the departments where they've been working… (Heather Inglis, Senior Global Inclusion and Diversity Manager. Standard Life Aberdeen, Financial Services. 5001-10 000 employees).

An additional benefit of diversity noted by employers was that success in engaging with gender diversity encouraged engagement with other forms of diversity. As GCU explained:

[Engaging with gender diversity] …does open the door to other conversations about race and disability that aren't happening….But because we've had this success story it's slightly left the door open…It has helped that gender's led the way and we've become familiar with seeing the world and seeing our statistics through gender so why not look at them from a more intersectional perspective? (Director of People and Equality and Diversity Advisor. Glasgow Caledonian University, Higher Education. 1001-5000 employees)

Engaging with the gender pay gap can thus help improve decision making within an organization while also opening the door to other forms of diversity.

Mobilising Human Capital

Efforts to close the gender pay gap also has the capacity to develop both individual organisations and the economy as a whole by developing talent in the economy that might be otherwise be under-utilised. This framing was emphasized by HIE, who discussed their efforts to engage businesses in gender equality:

I think people know that it's good to get everyone contributing to the economy and that women tend to be under-represented at senior levels. There is a good level of awareness about that. However, when we're having those discussions with business it's a much more powerful sell if you're able to demonstrate that, by bringing more women into senior roles, you're actually bringing underused talent back into play. (Equalities Manager. Highlands and Islands Enterprise, Government Agency. 201-500 employees).

A clear example of this was provided by Prepress Projects, who emphasized the business benefits of family friendly policies, which were particularly valuable in contexts with high training requirements:

You retain high-performing staff. You want to keep your best staff, and staff have lives and families. And if you're more family friendly, they'll stay longer. It's a big thing for us as a small business … Training is a big thing for us. To be honest, for people in this business it takes anywhere between 2 and 5 years, sometimes longer, to be a high-quality, top-level copy-editor and proofreader. Our training and investment budget in people's training tends to be high. So, when we want people to come, we want people to come and stay and have a career with us. We invest a lot of time and money, so we want people to stay. And if those people are family based, then a family friendly working environment will keep them. (Operations Director, Prepress Projects. Publishing. 11-50 employees)

Policies to address the gender pay gap could also potentially make employers more attractive to a wider pool of talent. For example, Amiqus were keen to advertise their roles as flexible and that they were open to alternative working arrangements like remote working, which had the additional benefit of making their roles widely geographically accessible:

What it does and what I like is that it opens up the opportunity to anyone, really. You don't need to be in here all the time so if you have other things in your life that you need time to do, then that's fine. For me that's the big benefit…I think long-term, the company benefits from opening up the opportunities very wide… (Head of People. Amiqus Resolution Ltd, Digital Legal Services, 11-50 employees)

More broadly, GCU emphasised that innovations around working conditions that could potentially address the gender pay gap would also have ancillary benefits for all employees:

Our approach is if we get it right for women, in this case, everybody benefits. We don't aim things specifically at women…it's about giving the signal that this is about good working conditions across the board, not just for the benefit of one population. (Director of People and Equality and Diversity Advisor. Glasgow Caledonian University, Higher Education. 1001-5000 employees)

As these findings show, whether in terms of supporting workers with families, opening up the pool of potential recruits or simply improving working conditions, policies to close the gender pay gap offered a range of benefits that could make organisations more effective and competitive.

Challenges

Timescales

An important challenge in addressing the gender pay gap identified by participants was that closing the gender pay gap was likely to be a long-term project. For example, Scottish Water noted that, given their large number of employees and low turnover, the annual 1% increase in the number of women employed there should be understood as positive shift, even if it did not appear overwhelmingly large. They also emphasised the importance of the long view:

It must be difficult…for any politician of any party to really think over the timescale that this kind of change will require. As we've said, the PSED's reporting has been around about 5 years. That's a pretty short timescale in the length of someone's total career…If any of the issues we have at the moment have been generated over, what, 250 years since the industrial revolution… getting better balance is the right thing to do. But in a typical modern political time horizon five years probably sounds like a long time. It really isn't. And that's one of the things that I think is one of the biggest challenges is how long people are prepared to keep working at something which is having a positive effect but is only doing so gradually. (David Hanlan and Darren May, Specialist HR Consultant and Performance & Reward Lead. Scottish Water, Water Utility. 1001-5000 employees).

Deloitte also emphasised that it was important to recognise that small, year on year fluctuations in the pay gap should be seen in context, as it may take time for positive changes to incubate and affect the overall numbers. As they observed:

We have an incredible pipeline now, and I can see already that we've turned the corner; but equally, if you look at our gender pay gap reporting numbers, some of those numbers in the statutory report have gone up. Just a tiny bit, but they've gone up. And yet what we're doing, we know, is making a difference. Gender pay gap reporting is a brilliant instrument to drive change, but equally I don't think organisations should expect to see a massive change in a short space of time. (Emma Codd, Managing Partner for Talent. Deloitte LLP, Professional Services, 17,000+ employees).

These observations reflect the fact that societal change is a long-term process. While it is critical to avoid complacency in closing the gender pay gap, it is also important to emphasise that slow progress does not, necessarily, indicate that progress is absent.

The Social Context of the Gender Pay Gap

Occupational Segregation

For employers, another important challenge related to the question of 'occupational segregation' - i.e. the tendency for women and men to cluster in particular sectors and occupational roles. Within this sample, there were a range of examples of occupational segregation. Scottish Water, for example, found that there were notable gender imbalances in certain roles within their organisation, particularly in apprenticeships:

…from the graduate programme, we will have closer to 50/50 in terms of men and women coming through our graduate programme, because a lot of those graduate positions are scientific, or engineering, or financial type positions…and I think we've had some success in being attractive broadly in those kinds of roles. The apprenticeships is more difficult. If we get 10% female applicants for our apprenticeship scheme that's pretty good. And that's a big challenge for us. (David Hanlan and Darren May, Specialist HR Consultant and Performance & Reward Lead. Scottish Water, Water Utility. 1001-5000 employees).

Greencity noted that:

We've struggled to get more balance within some of the manual roles, especially skilled manual roles, like driving the HGVs and stuff like that. So we have attempted to advertise in the areas where we would try to encourage more uptake from the female population….I've been with Greencity for 23 years and we've finally got our first woman driver… (Scott Erwin, Member Director. Greencity Wholefoods, Food Production and Wholesale, 11-50 employees)

Participants also identified sectors in which women were disproportionately represented. For example, Prepress Projects noted that the publishing business, on the whole, tends to be relatively female dominated. For this reason, they were concerned less with ensuring the recruitment of women than ensuring that their recruitment processes weren't excluding men. As they noted:

… Our company is predominantly women. It's just the type of work we do tends to attract women. It's quite straightforward for women to come into this role, go on maternity leave, and take back up where they were before, quite easily … we have the opposite from the gender pay gap, have to work quite hard to attract male candidates to apply … we have to target our recruitment and our advertising, the terminology used within an advert, to ensure that we're attracting both women and men, because we tend to predominantly get women applying. (Operations Director. Prepress Projects, Publishing, 11-50 employees)

Occupational segregation is particularly challenging as it reflects a wide range of societal dimensions which extend beyond the remit of any single employer. As was observed in the sample, factors ranging from culture to parents to school exerted an influence over occupational patterns.

Nonetheless, there were several examples within the research of employers taking pro-active roles in encouraging women to enter their sectors or apply for roles at their organisations:

Our CEO for example - there was an Ada Lovelace day - he was out speaking at schools, to 13-14 year old female students, about jobs in tech and why it's good to get into technology and the benefits of working in technology. (Head of People. Amiqus Resolution Ltd, Digital Legal Services, 11-50 employees)

Or, as another employer put it:

What we've been trying to do is use some of our female graduates in some of our divisions to actively go out to the universities to try and attract new students, to make use of the positive role models that we have. (HR Manager, Technical Services Organisation. 501-1000 employees)

Addressing occupational segregation, therefore, is likely to involve ongoing efforts from both employers and policymakers, and will likely require a multi-faceted approach.

Childcare Provision

Another cultural dimension of the gender pay gap, as noted above, related to the differential expectations on men and women in relation to caring responsibilities, which were seen to potentially disadvantage women in terms of their career progression. From this perspective, ensuring the provision of adequate childcare could play a crucial role in addressing the gender pay gap. The effects of a lack of appropriate childcare was noted by Prepress Projects:

…what I would say is the biggest issue for women returning to work at this workplace is childcare and the provision of it and access to it, especially if they have more than one child. If families have two or three children and a women is wanting to return to work it's a big issue for people in and around this area…They wouldn't come back to work … not because they don't want to come to work, but, one, because they can't afford the childcare and, two, they can't get the childcare provision. (Operations Director. Prepress Projects, Publishing. 11-50 employees)

Again, the challenge of affordable and accessible childcare necessitates activity from both employers and policymakers, which can in turn contribute to an ongoing reduction in the gender pay gap.

Conclusion

This chapter has identified a number of challenges and benefits associated with engaging with the gender pay gap. As above, businesses emphasized that engaging with the gender pay gap provided them with opportunities to improve their performance and mobilise additional human capital, while also encouraging other forms of diversity. Mechanisms that could improve the gender pay gap also had the additional benefits of widening the range of potentially available talent and improving working conditions.

As noted in the conclusion to Chapter 4, the Scottish Government's Gender Pay Gap Action Plan will explore the feasibility of extending childcare provisions while developing support for returning workers. In relation to the challenge of occupational segregation, a number of initiatives in the Action Plan have specifically sought to engage with this dimension of the gender pay gap through skills training, youth employment strategies, education at a range of ages and apprenticeships. A further challenge may be to ensure that evaluations are sensitive to the timescales which such changes are likely to involve, while also ensuring that progress is made.

Contact

Email: joseph.ritchie@scot.gov

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