Your Top 5 Fair Pay Questions in 2020

What a year it’s been! 2020, as we all know, has been a year of question marks. What does the furlough scheme mean for my business? How will Covid impact pre-existing inequalities at work? Why has everyone taken up crocheting?

We’re here, always, to answer your questions about diversity and inclusion, and to help you on your journey to workplace equity. We’ve compiled the questions we were asked most over the course of the year. And our equality experts and data minds have provided you with the answers. 

Question 1: What is the difference between Equal Pay and the Pay Gap?

Oh, this old chesnut. If men and women in the same job role are paid the same salary, then how can there be a gender pay gap? Well, it’s because equal pay and pay gaps are different things. 

To put it simply, in the UK, employers must give employees equal treatment in their employment terms and conditions if they do: 

  • ‘Like work’ – work that is the same or mostly equivalent 
  • ‘Equivalent work’ – work seen as equivalent under a job evaluation exercise 
  • ‘Work of equal value’ – work deemed to be of equal value in terms of effort, skill or decision making

E.g. Two people in the same role, with the same experience, tenure and responsibilities, should be paid the same wage.

We’ve got lots of resources you help you look at equal pay in your organisation. We recommend this ebook to help you get started with equal pay audits.

Pay Gaps, on the other hand, look at the mean or median difference in earnings between the average pay of a baseline group compared to the average pay of the non-baseline group. This gives an overall position on equity but is often unrelated to pay. Instead is related to the structural issues within an organisation and society more widely. You can look at pay gaps across all demographic groups, for example gender, ethnicity, sexuality, and disability.

Unadjusted and adjusted pay gaps

We can go one step further. There are two types of pay gaps, unadjusted gaps and adjusted gaps. The unadjusted, raw gap looks at the difference in average pay before considering any factors which might impact pay, as per the above description.

The adjusted pay gap, on the other hand, looks at the pay gap once all other factors have been taken in to account, factors which might justify pay differences (for example, education level or years of experience). 

Don’t worry – a full glossary of key terms will come your way in 2021.

Question 2: What does fair pay regulation look like across the world?

Despite limited travel this year, we’ve seen a surge in our clients and partners who are looking at fair pay on an international level. And the trend isn’t just unique to us; in September, we celebrated the first ever International Equal Pay Day, organised by the UN. and October 2020 saw Spain implement tight Gender Pay Gap reporting legislation.

We advocate for a global approach to equal pay and believe real change must be holistic. You can find out more about the regulations for gender pay gap reporting and equal pay around the world in our downloadable infographic here, and read more about our top tips for an international look at Equal Pay, in partnership with EPIC, here.

Question 3: How can I support Employees of Colour in my organisation?

After the murder of George Floyd and the subsequent peak in the Black Lives Matter movement in the Summer of 2020, we’ve been glad to see an increased focus on the support of Black employees, and employees of colour more widely, at work. 

Something we’ve found ourselves repeating to clients over and over again is that there is a difference between diversity and inclusion, even though the two are often grouped together. Diversity is the makeup of your workforce, demographics like gender, ethnicity, age, sexual orientation etc. Inclusion, on the other hand, is the measure of culture that enables diversity to thrive. It’s about integrating everyone into the workplace in a way which allows their differences to thrive in a beneficial way. The goal is to make everyone feel valued, accepted and comfortable. 

The journey to real inclusion is not an easy one. It takes time and a real commitment to change. But you have to start somewhere, and hopefully these resources will get you going on your journey:

  • Getting Started with Ethnicity Pay Gap Analysis – This ebook gives top tips and expert advice on improving disclosure rates, effective data collection, and the best calculations for EPG analysis based on the size of your organisation
  • Supporting People of Colour at Work – We analysed the ethnicity pay gap reports of some major UK companies to provide you with best practice actions and next steps to improve inclusion in different areas of your company
Question 4: How can I improve representation at the top levels of my organisation?

A lack of diversity in the top, highest paid positions is one of the most common issues we see emerging with our clients. Diversity within the Senior Management team is a priority and a target for a lot of organisations in 2021, not only because diversity of thought leads to business innovation, but also because role models and top level buy in encourages quicker change. Improving representation in senior level positions will also help to narrow pay gaps!

In a recent workshop we ran to support organisations with their Ethnicity Pay Gap analysis, we recommended the following top 3 actions to improve representation in top levels:

  1. Data, data, data: Analyse the demographic makeup of new hires across different job levels to better understand where you’re lacking a diverse candidate stream. Then work with this information to set clear targets around diverse recruitment
  2. Accountability for Leadership Teams: Ensure you have diversity and inclusion related KPIs for the Senior Leadership Team. For example, one of our clients the Greater London Authority ensure that all Senior Management Team members have an annual appraisal objective on diversity, specific to their role, for which they are accountable. They then ensure progress is report to their Diversity and Inclusion Management Board – you can find out more in their report here.
  3. Listen to your staff: Implement reverse mentoring schemes, or a mentorship scheme for high potential mid level employees, who with the right support, could move into those top level positions.
Question 5: How can I make sure my new flexible working policies in 2021 don’t exacerbate inequalities?

It looks as though flexible working is here to stay. We care about ensuring that major workplace changes account for all types of employees, and don’t exacerbate the inequalities which already exist. 

‘Flexible Working, a Talent Imperative’ by Timewise shows us that of all the people surveyed, 77% of women, 80% of people with health conditions, 91% of carers and 74% of older workers find flexible working essential or highly important. The flexible-working future is an opportunity to better support employees and retain good staff without losing out on productivity or good company culture. 

We had a lot of questions about flexible working this year, so we developed a research study in October to support organisations with dynamic work practices for improving diversity and inclusion through flexible work. It comes complete with best practice, an employe checklist and tips for moving from the Covid-19 Pandemic.

The report is free, but if you can, we’d love for you to donate to either the Fawcett Society or The Runnymede Trust if you download it. You can find out more about the report here.

Any other questions you’d like us to answer? Feel free to get in touch