International Equal Pay Day falls on the 18th of September, organised by the UN to represent the longstanding efforts to ensure equal work is remunerated fairly, regardless of gender, race or other diversity pay gaps. It is a good opportunity to look at your organisation and consider whether you are doing enough to tackle pay inequality.
Read our blog for a summary of what the day means for businesses and how your payroll team can help you achieve your targets.
Why do we need International Equal Pay Day?
Traditionally discriminated-against or minority groups of people are paid less, globally. For example, in the UK, on average, for every £1 earned by a man, a woman earns 90p, even when they have a similar personal and professional background.
International Equal Pay Day, observed annually on 18th September, is a crucial reminder of the ongoing struggle for wage equality. The day calls attention to both equal pay – that two people doing the same or similar role will be paid equally, as set out in the UK in the 2010 Equality Act – and also the broader pay inequities experienced by various marginalised groups.
Alongside like-for-like equal pay, International Equal Pay Day is a good opportunity to look at broader pay gaps, considering the average hourly pay for a group of people (like women), across job roles and functions. This brings to light disparities like the average seniority of diverse groups and how long they stay in the business.
What measures can you take to tackle pay gaps?
- Have equitable and transparent policies
This can involve regular pay audits, addressing discrepancies in compensation, and standardising compensation, to ensure that all employees are evaluated based on consistent criteria. Clear guidelines for salary bands, performance evaluations, and promotions can minimise the impact of biases.
- Make workplaces a more supportive place for women and diverse groups
Initiatives such as flexible work arrangements, mentorship programmes, childcare support, strong parental leave policies and educational initiatives can support women and diverse employees to grow and thrive at work – and therefore progress in their careers. For example, for every month of paid paternity leave a father takes, a mother’s earnings increases by 7 per cent.
- Address promotion issues directly
Regularly monitoring promotion rates across different demographics can highlight any disparities. Organisations can then take targeted actions to address these gaps and ensure equitable advancement, like offering professional development opportunities to prepare employees for higher-level roles.
What role does your payroll function and team have in tackling pay gaps?
As you can see, equal pay is a far-reaching organisational issue, encompassing culture, existing structures and hierarchy. However, your payroll function is a fundamental tool in your arsenal when it comes to addressing equal pay and pay gap issues.
Broadcaster and women’s rights campaigner Mariella Frostrup claims that key to addressing pay gaps is a “forensic understanding” of the pay structures in your organisation. This requires vigorous payroll reporting.
Payroll teams should maintain comprehensive records of employee compensation, including salaries, bonuses, and benefits. This data can be used to conduct pay audits and inform strategies to close the gaps. When pay equity initiatives are in place, comprehensive reporting allows for monitoring of their effectiveness. Payroll teams can generate reports that highlight progress and areas for improvement, guiding decision-making processes.
Payroll software should allow you to effortlessly pull reports and define them using metrics such as gender and race. OneAdvanced’s Payroll includes Gender Pay Gap as a pre-built statutory report, helping your team develop a clear picture of its equal pay performance. You can also dive in deeper with advanced and customisable reporting, allowing your payroll team to gain a granular view of all aspects of the pay cycle. Robust reporting functionalities empower your payroll team, saving time spent gathering and formatting data – freeing up capabilities for proactively addressing disparities and implementing solutions.
Our commitment to progress at OneAdvanced
OneAdvanced as an organisation has done dedicated work addressing its own gender pay biases, reducing it from a median average of 11.4 percent in 2022 to 6.2 percent. We have been able to do so through a variety of methods, including introducing a menopause policy and our flexible working approach – all underpinned by strong reporting.
International Equal Pay Day serves as a powerful reminder of the work that still needs to be done to achieve pay equity. By taking proactive measures and ensuring your methods for improvement are underpinned by strong reporting, organisations can make significant strides towards closing the pay gap.