Why, where, and how you should be taking a deeper interest

In France during 2018, President Macron’s administration declared gender equality a priority. Legislation now requires that companies with at least 50 employees publish information each year on Gender Pay Gaps and actions taken to address issues. Germany gives workers at companies with over 200 employees the right to find out what their co-workers of the same level and opposite gender are earning. There are multiple examples of gender equality legislation popping up around the world and the world is (mostly) behind this change. But why, and how should you be looking into it?

Gender equality and equality in general has often been pitched as ‘the right thing to do’, and it is. But that’s not all it is. It may or may not shock you to learn that diversity is not just good for business, it’s incredible for business. For the people in the know, fast tracking the journey to improved diversity and inclusion is a crucial step forward if you want your company and your country to lead.

What Macron knows, that you might not, is that promoting a diverse workplace is one of the key strategic and policy decisions you need to be making today to ensure that your company prospers. Diversity not only improves employee retention rates, draws prospective employees towards a company and drives innovation, it also pays off directly. Just like the actions of global leaders, the stats are quite clear. According to a report by McKinsey gender-diverse companies are 15 percent more likely to financially outperform their competitors and ethnically diverse companies are 30 percent more likely to do the same.

For data transparency and reporting, fear and not-knowing where to start can hinder innovation and maximisation of talent”

Diversity brand image is increasingly important

In all the talk about recruiting the best, how often do we interject that diversity is paramount to the hiring process on a sheer employer brand level? Large corporations are already doing something about it with policies around parental (maternity & paternity) leave, time off for carers,  benefits programmes that are positive for 100 percent of their employees and guaranteed opportunities for the whole workforce (rather than half of it). It may hurt right now, but employees are looking to see how a company’s behaviour reflects what they stand for, how they want to live and who they want to be. According to Glassdoor, 67 percent of job seekers look at workforce diversity when evaluating an offer, and PwC found that 61 percent of women look at the gender diversity of the employer’s leadership team when deciding where to work. Talented individuals go to companies who do better with diversity, which also contributes to diverse companies outperforming their competitors.

Diverse workforces also drive more innovative approaches to work. Research by Hewlett, Marshall & Sherbin shows that leaders with diverse backgrounds help companies innovate, and foster open environments for idea experimentation. How often, when you talk about creativity, do you talk about the diversity in the room when you’re creating? At a recent Equileap event  a representative from L’Oreal said ‘I believe that a diverse group of individuals is always smarter than the smartest person in the room’, and she was right.

Before we assume that increased diversity legislation is more of a problem than an opportunity, it is important to know that pay reporting actually pays off. UK legislation – which mandates for companies with a workforce of more than 250 employees to report on their gender pay gap on an annual basis – has had a huge impact on the companies engaging with it, their employees and general approaches to the workforce. We have seen this in the clients we work with over and over again. In general, reporting pay equality and the transparency of data has a positive impact on all minorities in a workplace and how fairly they are paid, and then impacts positively on the company as a whole: up to 15 times more sales revenue to name just one example.

Employees look at how a company’s behaviour reflects what they stand for, how they want to live and who they want to be”

Start by knowing the numbers

In our experience there are times when fear and not-knowing can hinder innovation and maximisation of talent. When looking at the entire, fast-moving pay transparency agenda where do you start? There are a range  of indicators in your system which can help.

What to look at when looking for pay equity issues:

• Age (to check unconscious bias or policies that disadvantage women of childbearing age for example).

• Length of service (to look at promotions and career progression, and see how women’s progression compares with men’s over time).

• Business Unit/Department (to see if there is any occupational segregation, and whether women are concentrated in roles which pay less per hour).

• Grades/Job level (to see how gender plays into promotion, and to make sure men and women are paid the same when working at the same level (otherwise known as equal pay).

• Ethnicity (to check the gender pay gap by ethnicity; usually higher for women who are non-white).

• Full Time Equivalent (to see how women work in part-time roles, as these usually pay less per hour).

• Location and Market Rate for roles (to

help explain to employees pay differences in locations).

This data, when analysed from the right angle, provides decision makers with smart insights into how to reshape their company, and helps them create fairer, more productive and more diverse teams.

The way forward for companies now is to deep dive into the statistics, recruit employees who see themselves belonging to your company culture and values, and to make sure you don’t lose great talent. Do all of this with impeccable, incontrovertible data.  And if you don’t believe us, or the research, just ask our friend Macron. 

Dr. Zara Nanu is the CEO and co-founder at Gapsquare.





Have you got some news to share? Please send your stories to beckie@erp.today