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Today is Equal Pay Day: Can HR Technology Help Close the Gender Pay Gap?

November 14, 2019 | by SumTotal Blog

The European Commission’s 2019 report on the gender pay gap reveals the following:

  • Women earn over 16% less than men per hour in the EU.
  • Women earn 84 euro cents for every €1 men earn.
  • Women work around two months free each year, compared to men.

While many organisations are proactively seeking to redress any imbalance, the problem persists. Research substantiates this claim. The latest estimates are that only 55% of employers have or are conducting remediation to resolve causes of pay inequities, and 9% of employers say the issue isn't on their radar at all.

What is Equal Pay Day?

In the UK, it is the day when based on data about average pay, women overall stop being paid compared to men. This year, it falls today—Thursday November 14. Organised by the Fawcett Society, the UK’s leading membership charity campaigning for gender equality, the day is about raising awareness and encouraging everyone to participate in the fight against gender inequality.

Why is it important?

The reasons to support this day are too numerous for this one blog post. However, here are some of the top reasons:

  • The UK’s gender pay gap stands at 11.9%. There are no sectors in the UK economy where women are paid the same as men. Gender pay gap reporting is based on hourly wage, and therefore, numbers of hours worked does not impact the data.
Gender Pay Gap: women still short-changed in the UK

Source: Gender Pay Gap: women still short-changed in the UK

  • London has the largest gender pay gap in the UK, with women earning 30.4% less than men. This equates to women working for 71 days for free
  • Birmingham has the second biggest gender pay gap, with men earning 17.8% more than women.

How to move the scales

Resolving the disparity in pay is complex and involves more than merely a number. Employers must look to ensuring that all employees can expand their role and proceed up the management ladder to higher-paying positions. It is about reviewing how your organisation views maternity and paternity leave. It is about facilitating professional development, and it is about further government action beyond the Equality Act 2010. Above all, it is about time, as real change cannot occur overnight.

HR’s role in tipping the scales

“What HR can do is to help initiate, shape and nudge practices and required leadership behaviours. For example, HR can play a role in articulating and initiating policies in recruitment, compensation and other functional areas to ensure equal roles receive equal pay, anti-discrimination and increase diversity in terms of fair representation of different groups of people.” Merle Chen, Chief Talent Officer, The Lo & Behold Group

Technology has a part to play also. Specifically, HR technologies that provide an employer with meaningful insight into how it is both compensating and promoting its employees. HR can leverage such data to develop company standards around pay. HR must also utilise technology to ensure all employees are assessed and promoted in a transparent and objective manner.

Leveraging a compensation management tool, an organisation today can simplify and make standard how they plan, budget, and execute their compensation and reward policies. SumTotal's Compensation Management includes all aspects of employee compensation, including bonuses, variable pay, and long-term incentives such as stock options. Additionally, managers can review proposed salary adjustments, compare them to standard guidelines (e.g., compa-ratio) or market salary survey data, adjust as necessary, and approve the compensation plans for their direct reports.

The applications of a compensation management tool are broad and particularly beneficial to global organisations. However, I believe employers can also capitalise on the function to ensure all employees are receiving equal pay.

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