New case study reveals six key factors for employers to reduce gender pay gaps
Genuinely diverse recruitment, a ‘grow your own’ approach to talent, leading by example and an open, high-communications culture are key areas that employers can address to help eliminate gender pay gaps, a new case study report from the Institute for Employment Studies (IES) reveals.
However, just 3% of the estimated 7,000 employers affected by the gender pay gap reporting legislation have published their figures. Those that have reveal some significant average pay shortfalls for women, with the average of all the median pay gaps already submitted standing at 9%.
In this context, IES’ new report explores how FDM Group – the sixth employer to publish its gender pay reporting statistics – was able to eliminate its median gender pay gap and highlights the positive impact that an open and diverse culture can bring.
The research, based on internal qualitative research and an external evidence review, identifies the six key factors that have led to FDM Group’s success in almost eliminating its gender pay gap. These are:
- Leadership – Setting the example from the top of the organisation is essential. Although the breakdown of the top 25% of earners at FDM Group is skewed towards men, its success in closing its gender pay gap shows, contrary to what some employer gender pay reports have suggested, that top-level gender imbalance need not be a barrier to achieving pay parity.
- Investing in talent – a ‘grow your own’ approach to talent has underpinned the progress towards gender pay parity at FDM Group, avoiding an emphasis on external recruitment and pay negotiations which, research suggests, can contribute to male pay premia.
- Appropriate HR and diversity policies – a balance of informal activities, such as mentoring, and formal policies, such as fixed pay-rates and job- and skills-focused recruitment methods and monitoring, appear to have been important in FDM Group closing its wage gap.
- Measuring and monitoring – FDM Group has used gender and other diversity statistics as a key tool to support and monitor its progress towards gender equality, just as it regularly reviews its financial and sales performance data. Employers should see an important relationship between these.
- An open, high-communications culture – staff are encouraged to express opinions and raise any concerns.
- A multi-pronged approach – employers should try out a range of HR and diversity initiatives and constantly look to improve, in a sustained approach to promoting equality and diversity.
Duncan Brown, Head of HR consultancy at IES and author of the report, said:
“While the continuing gender pay gap of almost 20% is indeed a national and social problem that will not be easy to close, FDM illustrates just how effectively individual employers can act to eliminate any male to female ratio differentials and how this can underpin their business success.”
Sheila Flavell, Chief Operating Officer at FDM said:
“We would be working towards gender gap equality regardless of the new regulations. Our model takes the best people, regardless of background and gives them the training and skills, making a diverse workforce a fundamental tenet of our business model and culture.”
‘Gender pay: How do you achieve and report parity?’ is available to download from the IES website.