Anita Eunson, a Tax Director at Grant Thornton, and leader of the firm’s Employer Solutions practice in Scotland, tackles the gender debate and the changes it could bring to Scotland’s business landscape
Diversity in the workplace has become an increasingly hot topic in recent years, as business leaders grapple with the challenge of creating a more future-focused economy.
The BBC gender pay-gap revelations highlight the need for all companies and industries to take a more proactive approach to tackling some of the chronic issues holding back sustainable growth in the economy.
Historically, workforce diversification was viewed as a compliance issue and nothing else, but the reality is that increasing transparency and a more demanding marketplace could lead to businesses that fail to adapt being left behind.
2017’s Women in Business report from Grant Thornton revealed that more than a third of companies around the world have no females in senior management roles. While it’s a worrying statistic, there is also some room for optimism. That figure also suggests a gradual rise over the last five years, although clearly the momentum is still too slow.
Now, more than ever, Scotland’s business community needs to tackle the issue head-on as part of a wider review of how we do business more effectively. Gender and demographic inequalities, combined with a skills shortage and low productivity, are creating a lethal combination, holding back the potential for real, purposeful growth.
Gender pay gap reporting was introduced by the Equality Act 2010 (Gender Pay Gap information Regulations 2017), meaning that from April 2018, all employers with more than 250 members of staff will have to publish a gender pay gap report online. The new ruling is part of the 2010 Equality Act, which was updated to specifically tackle gender inequality. The issue has been placed firmly on the political agenda and could create huge reputational issues for businesses that aren’t seen to be taking affirmative action.
Early indications of gender pay gap reporting reveal that interpretation of the regulations is not straightforward and is leading to common errors among employers such as:-
- ensuring that all the relevant data required is collated (which can be difficult where this is held on various systems across the payroll and HR functions)
- picking up the correct pay elements to be included in hourly pay and bonus pay calculations
- manipulation of the data to produce the mean and median gender pay and bonus pay calculations and quartile calculations and
- identification of relevant employees and full pay relevant employees
Additionally once the gender pay gap results have been produced it is important for an employer to look at the drivers behind their results. It may be adjusted reporting is undertaken to compare like for like (e.g. all employees of same grade/job type) and results in the gap reducing to an insignificant level.
Careful consideration also needs to be given to the accompanying narrative to the headline figures which provides the opportunity to outline strategies and initiatives being undertaken to reduce the gender pay gap.
The economy is rapidly evolving and the future of the workplace looks set to be dramatically different as we enter a new period of digital transformation. Rather than viewing this as a grave threat, businesses can embrace change and seize the opportunity to explore what is holding them back – from inequality to shared enterprise. An increasingly agile, driven workforce needs fresh thinking from the top. Empowering every individual can help to unlock the growth potential in businesses and build companies that are fit for the future.