Getting it right: Gender Pay Gap Reporting

Earlier this month I met with Kirsty Hayward to learn more about Gender Pay Gap Reporting and specifically how she approached it at Virgin Media.

Until recently Kirsty was the Reward Director at Virgin Media, with full accountability for the Reward agenda covering all aspects of compensation (fixed and variable) benefits and Pensions, Performance Management, Employee Relations and People Insight.

One of Kirsty and her team’s key achievements before leaving Virgin Media in January, was delivering Gender Pay reporting, a topic, as we know, which is receiving a lot of media coverage. Kirsty thank- you for your time and explaining how to ensure that it receives the right attention!

TB: How did you first get into Reward?

KH: I’ve always worked in HR, with more than 15 years specialising in Reward. I have a passion for numbers and studied Theoretical Physics and Maths at university, so when it came to my first job I thought a finance role seemed the obvious choice. However, having finished my finance placement on the commercial graduate programme at Yellow Pages, I found it wasn’t for me. I was saved by my HR Director who suggested I try a placement in the Reward team. And I haven’t looked back!

I gained breadth working for five years in an HR generalist role to understand the customer facing side of HR. This gave me fantastic experience and insight that I still use today as a Reward specialist and as a member of the HR leadership team.

TB: The Gender Pay Gap and Equal Pay are hot topics in the media, so does everyone really understand it?

KH: In a word no, and it’s infuriating listening to some of the media talk about them as if they’re the same thing.

The Gender Pay Gap compares average pay for all men and women across all types of jobs, at all levels of an organisation. Essentially, it’s about representation, and asks a broad question of why, on average, women earn less than men.

Equal Pay is far narrower. It makes it unlawful to pay men and women differently for carrying out the same or similar job, or a job of equal value.

Generally, Gender Pay Gaps exist because of the types of jobs that men and women perform and how those jobs are paid. There is typically a higher Gender Pay Gap in occupations or roles where women are underrepresented, such as more senior levels, or in male dominated occupations like engineering and sales.

TB: Why did the Government introduce Gender Pay reporting and what’s the legal position?

KH: The UK has a persistently high Gender Pay Gap, so regulation was introduced to help close it. But more fundamentally it’s to drive true gender equality in the workplace so women have the same opportunities as men to fulfil their potential. It’s about making the most of the skills, experience and talents of everyone, which in turn will benefit the economy.

The latest government numbers show that the pay gap between men and women, on average, is still 18.1%. This is something we all need to address.

Although there isn’t a legislative requirement for businesses to close to their Gender Pay Gap, there is a requirement for them to report the data publicly. The Government hope publicity around these reports will create a self-governing mechanism, as responsible organisations will have to answer to both their employees and the wider public.

And this isn’t a one-time exercise. Their long-term aim is to get companies addressing the underlying causes of their Gender Pay Gap so they are able to demonstrate a year on year trend towards closing it.

TB: Is this a significant time burden for companies?

KH: Virgin Media was supportive of publishing its Gender Pay Gap, and we took an active role in participating in the consultation on the Government’s white paper.

We started work on our analysis in 2016 so we had sufficient time to test our methodology and could work with the business on creating an action plan on the steps needed to create greater gender equality.

There were the usual challenges in extracting data from multiple sources and systems. We underestimated how long it would take to pull the data from various systems, then consolidate it on an individual employee basis. This was our biggest challenge taking several months to capture and validate, and then carry out the necessary calculations.

The time required to manage this process effectively, not just as a data exercise but also to communicate it clearly, will be a concern for smaller organisations who don’t have the resource available to do this, particularly as the April 4 deadline looms. At the time of writing, thousands of companies still need to publish their reports.

TB: Did you get any surprises from the data?

KH: There were no surprises. Virgin Media has a large number of STEM (Science, Technology, Engineering and Maths) based roles, and similar to STEM roles across the UK, these are mostly filled by men.

These roles attract higher pay and allowances than the roles which the majority of our female employees perform.

TB: What feedback have you had?

KH: We’ve had fantastic feedback on our report from both our HR and industry colleagues, and from our employees.

“I think this was due to the fact we told our story in a clear and simple way, which was honest too in outlining the work that needs to be carried out to create greater gender equality.

The Prime Minister also positively referenced Virgin Media as one of the companies that had taken the lead in publishing their reports early, in a speech urging other companies to follow suit.”

TB: What did you learn from the process of writing the report?

KH: The biggest learning was getting stakeholders to understand that Gender Pay Gap Reporting can’t be a Reward owned exercise. The numbers, analysis and recommendations are, but the action plan to close the gap must be part of the wider diversity and inclusion agenda within the company.

We took the time to explain to our Board and Senior Leadership Team what the data meant. We ran education sessions explaining the difference between the Gender Pay Gap and Equal Pay. We then went on to show what the Pay Gap data revealed on a divisional basis.

Although the data didn’t surprise us, the story sitting behind it was important to tell to our people.

“We wanted all our employees to understand what the data meant and what the business was going to do about it.”

It took some time for people to understand that focusing on one positive action such as increasing the number of female employees in senior leadership roles, although the right thing to do, isn’t the silver bullet for closing the gap. Yes, it helps shift the dial, and solves gender balance at senior levels, but a few senior positions can never close the gap caused by the vast majority of employees working in lower paid roles.

TB: How does Gender Pay fir into the Diversity and Inclusion agenda?

KH: Most organisations recognise there is occupational segregation, where there is a concentration of women in lower paid roles and that women are less likely to progress to senior levels.

There’s lots of evidence to show that companies which are more diverse perform better. It’s common sense for the gender make up of your company to mirror the customers and communities they serve. To reduce their Gender Pay Gap, companies need to address their gender representation across the roles they have at all levels.

Many of the representation challenges can’t be solved by one company alone. A collective response is required. National demand for STEM skills is high but the number of women studying and working in these areas remains low.

Recognising and rewarding female talent is important but many of the actions companies can take to reduce the Gender Pay Gap are broader than just pay.

“Companies may need to look at leadership and employee behaviour, how women are recruited, what support there is for returning mothers, and if there are any cultural barriers for women in their workplace.”

TB: What were the challenges once the report had been written?

KH: We thought carefully about when to publish our report. No other company from the telecoms/media sector had published so we didn’t know how we would compare with our competitors.

In the end, we decided we would publish our report as soon as we could, and did so in September 2017. We were the second Virgin company and first company in our sector to do so.

Virgin Media’s Gender Pay Report 2017 can be viewed here.

TB: What advice would you give to companies who haven’t started this yet?

KH: Don’t underestimate the time required to do this. If you haven’t started pulling this together yet, I would strongly recommend this becomes your priority – it takes longer than you imagine.

Don’t just see it as an annual reporting requirement, but as a measure that shows your organisation’s approach to ensuring women are equally represented in all roles, and at all levels.

TB: What’s your key message for Reward and HR Leaders?

KH: It’s important to get the message out there that Gender Pay Gap Reporting isn’t just a Reward data exercise.

“It’s vital to get the support of your Board and Senior Leadership team so they understand their Pay Gap, and how it fits in the diversity and inclusion agenda, so they can take action to create true gender equality.”

TB: What is next for Gender Pay?

KH: By April 4th, all companies that employ more than 250 people will have to publish their Gender Pay report.

There is a lot of debate about whether the definition of pay should include salary sacrifice or not, so we may see some future changes to the Government’s guidance.

Of course, Gender Pay needs to remain part of the overall diversity and inclusion agenda, but from a Reward perspective we need to think about how we reward and recognise people to ensure we attract, retain and incentivise a diverse and inclusive workforce.

Kirsty, thanks again for your time. I’ve personally received many comments on how you and your team produced an excellent, concise and easily digestible report which has simplified a potentially complicated issue.

Toby Burton delivers specialist Reward assignments on a Search and Interim basis to clients across UK industry.

For further advice contact Toby Burton: