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The government can do more to promote the business case for achieving equal pay
Leading edge businesses in good diversity practices examine their pay gaps not because of legal obligations but because they understand the bottom line benefits. Although our new survey evidence shows that the average cost of conducting a gender pay audit is more than £5000, fifty times higher than government estimates, the costs of failing to act can incur many hundreds of thousands of pounds to put right and huge litigation costs as well as serious costs to damaged reputation. Such consequences need to ne loudly trumpeted.
The causes of the pay gap are many and varied and not all are within the immediate influence of employers to tackle on their own. This has been recognised by countless Commissions and national enquiries set up to study the phenomenon. Such studies have concluded that there are solutions within the control of employers and that these can be informed by carrying out equal pay audits to expose problems and investigating the reasons behind them. But employers need to be convinced of the value of carrying them out and committed to root out underlying causes of problems. Solutions will only be effective if they relate to identified problems and causes and take into account organisational challenges and contexts.
The CIPD recommends the use of voluntary rather than compulsory equal pay audits because employers need to be committed to expose the underlying causes of gaps thrown up by audits rather than simply budgeting for them iron them out. Unless there is understanding and commitment to expose underlying causes sustainable change will not be effected and problems will recur and stimulate backlash against the equal pay agenda.
On behalf of the Government Equality Office we are working with other stakeholders in the employment field and the Equality and Human Rights Commission to develop tools for employers to improve gender pay transparency and guidance to support the Equality Bill.
The Equality Bill, which is currently making its way through Parliament, will introduce provisions to enforce gender pay reporting on private and third sector organisations of more than 250 employees. The government says it will not make reporting compulsory until 2013 if voluntary progress is deemed to be insufficient.
Dianah Worman is diversity adviser of the CIPD
