Equal pay review process proving relatively painless

PAY DISCRIMINATION

Equal pay review process proving relatively painless

New research published by the Equal Opportunities Commission suggests that only a third of large employers are likely to have carried out an equal pay review before the end of 2003. Yet the study also makes clear that the vast majority of organisations which have already conducted a pay audit found them to be pretty much plain sailing.

The research, which was carried out for the EOC by the Institute for Employment Studies, found that as many as 70% of the sample of 67 organisations which had conducted an equal pay review or were in the process of conducting one, said they had experienced few difficulties.

Where pay gaps were found these were often quite substantial. The lowest gender pay gap was 5% and the highest was 40%.

Julie Mellor, chair of the EOC, said: "The research shows that the majority of those who have done a pay review did not find it difficult. It also found that wanting to be a good practice employer was a key motivation for doing a review - I am confident that their commitment to equality will help those employers attract and retain the best people for their organisation."

Data limitations

Predictably, some organisations say that their reviews were restricted by the quality of their HR and payroll databases and the data that they held. Others had concerns about the length of time and resources involved in conducting a review.

Problems cited by 67 organisations that had conducted or were conducting an equal pay review
	Number of mentions
It took too long to complete	8
Data required were in more than one database	8
Some data were not available	5
It took too much staff time	5
Review process was more costly than anticipated	4
There was internal opposition to taking action	3
It was difficult to arrange and gather data	2
Computer system was not powerful enough to conduct the analysis	1
There was no consistent grading system	1
Scope of the review was very wide and there was too much information to handle	1

Source: Monitoring Progress Towards Pay Equality, EOC (2003).

Other key research findings

What was striking was the fact that the majority of employers contacted by the Institute for Employment Studies have no plans to check they pay women fairly. The majority of the large employers were at least fairly confident that their existing pay structures and systems treat men and women fairly — but often these arrangements were "limited in scope".

Many employers felt it was sufficient that pay was linked to the job, responsibilities or performance, rather than to gender, and two-fifths or organisations had no plans to monitor the relative pay of women and men.

Among the key findings are:

• Already undertaken a review: The research reveals that only 18% of large employers (those with 500 or more employees) and 10% of medium-sized employers (100 to 499 employees) have actually done a pay review or are in the process of doing one. But there are some telltale signs that the pace of change is increasing.
• Plans to carry out equal pay review: The majority of employers have no plans to conduct a review at all (54% of large and 67% of medium sized employers). "It is evident that much more needs to be done," the IES report says.
• Sharing pay information: Over a fifth of employers (22%) do not allow employees to share information about their pay with a colleague.

What is an equal pay review?

The EOC states than an equal pay review "involves comparing the pay of women and men doing equal work, investigating the causes of any gender pay gaps and closing any gaps that cannot be satisfactorily explained on grounds other than sex". But an equal pay review is not simply a data collection exercise. Says the EOC: "It entails a commitment to put right any gender pay inequalities and this means that the review must have the involvement and support of managers with the authority to deliver the necessary changes. It is also important to involve the workforce to maximise the validity of the review and success of subsequent action taken." Whatever kind of equal pay review process is used and whatever the size of the organisation, the essential features are the same: compare the pay of men and women doing equal work explain any equal pay gaps close those pay gaps which cannot be satisfactorily explained on grounds other than sex. The Equal Opportunities Commission has set ambitious targets for employers to carry out equal pay reviews: it wants half of large employers with more than 500 workers to have carried out a pay audit by the end of 2003, and a quarter of the smaller organisations to have done so by December 2005. While employers are not required by statute to conduct equal pay reviews, only a review can ensure that pay systems are free from sex bias.

Essential reading "How to conduct equal pay reviews", E-research, issue no. 8, February 2003, published by e-reward.co.uk. Price: £50 + VAT.

 

A final word

Want to know more?

Title: Monitoring Progress Towards Pay Equality, carried out for the EOC by Fiona Neathey, Sally Dench and Louise Thomson of the Institute for Employment Studies.

Methodology: The study was based on four elements:

• preliminary interviews with five organisations known to have conducted a pay review
• a telephone survey of 251 large and medium-sized organisations spread evenly across the manufacturing, private service and public sectors.
• case study research in eight organisations which had either completed an equal pay review or were in a more advanced stage of the process
• a review of literature and other sources.

Availability: The full report is available on the EOC web site or from the EOC helpline, tel: 0845 601 5901. A summary of research findings is also available. To find out more visit www.eoc.org.uk

Posted 1 April 2003