New case study reveals six key factors for employers to reduce gender pay gaps
28 Nov 2017
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.
As the sixth employer to publish its gender pay reporting statistics, FDM Group, an international professional services organisation focusing on information technology, stands out in its male-dominated sector and beyond. FDM Group has a zero per cent median pay gap, contrasting with the technology sector’s 25 per cent and the UK’s 18 per cent median wage gap.
Just three per cent of the estimated seven thousand 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 nine per cent.
In this context, a new case-study report, published by the Institute for Employment Studies (IES), explores how FDM Group 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 per cent 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 per cent 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.’
Notes to editor
The median gender pay gap is the difference between the midpoints in the ranges of men’s and women’s pay.
Analysis by Mercer revealed that men in high-tech companies earn 25 per cent more than women, compared to the UK overall of 18 per cent. See Mercer (2017), The gender pay gap in the UK tech sector, Mercer
IES undertook analysis of the average pay gaps of those organisations that have already published their data to the government’s reporting service. See this blog: http://www.employment-studies.co.uk/news/gender-ethnicity-and-disability-pay-gaps-policies-and-practices-changing-minds
The FDM example supports earlier international academic evidence that IES gathered on how pay gaps can be closed, on behalf of the Equality and Human Rights Commission. This research can be accessed here: http://www.employment-studies.co.uk/resource/tackling-gender-disability-and-ethnicity-pay-gaps-progress-review
Interviews and further information
Duncan Brown, IES head of HR consultancy and author of the report is available for interviews, as is Sheila Flavell, chief operating officer at FDM Group. Please contact the relevant liaison below.
Mark Jack, communications officer at the Institute for Employment Studies
01273 763 435 or firstname.lastname@example.org
Lynda Feeley, head of media relations at FDM Group
0203 056 8282 or email@example.com
The case study report is available to download from the IES website.