Equal pay for equal work: as simple as it sounds?

“I do not want to be remembered as the woman who complained about money”

Carrie Gracie, BBC Radio 4 Today programme, 8th January 2018.

Remuneration can often feel like an awkward topic, for both staff (current and potential) and hiring managers. How do you ensure everyone is getting the best deal? And perhaps more topically, how can you guarantee everyone is getting a fair deal?

Carrie Gracie’s resignation from her role as BBC’s China Editor because she believed she was not getting equal pay for equal work reminded me of an excellent article I read last week by Alexandra Frean in The Times. Frean argued that hiring managers shouldn’t ask about an interviewee’s current or previous salary during the recruitment process. The practice, she states, leads to only incremental pay increases when moving jobs, which can not only devalue people but means unequal pay follows women and those from BME backgrounds throughout their career. This echoes a long-held view of mine: salary should be determined based on the role’s demands and value, rather than people’s perceived market worth.

Some may argue that the two are essentially one and the same: people are paid a certain salary because they can handle a role’s demands, and their market worth will reflect this. However, Gracie, backed up by the BBC pay data on its top stars published in July 2017, alleges that this isn’t true in the upper echelons of the BBC. Men there are being paid significantly more than their female counterparts for comparable work. Where is the explanation for why these men are apparently worth more?

Ineffective equality: how do we strengthen existing measures?

Whilst little data on equal pay for equal work in the UK exists (companies are only required to publish data on mean pay, which does not consider differences in seniority), many believe there is similar disparity across multiple sectors. For example, the NHS Agenda for Change (introduced in 2004) requires complete transparency for salaries and yet we know there are still differences in pay between men and women performing the same role.

Some American states believe that the answer is supplementing equal pay legislation with legislation which bans hiring companies asking about current or former salary. In Massachusetts – which in 1945 was the first US state to legislate for equal pay – such a law will be taking effect from July 2018. This change is expected to have an impact on salary offers throughout the job market, not just for women and those from BME backgrounds.

It’s not all about gender…

Such legislation could also benefit those returning from a period of unemployment. Anecdotal evidence from my own work suggests that those coming back from a career break (voluntary or otherwise) are expected to accept a lower salary in some organisations than someone who has been in continuous employment would. Those moving over from a lower paying industry are also at risk of being offered less than other applicants. This, in my view, is unacceptable – the responsibilities of the role and the need to execute them to a high standard do not diminish because the appointee has been out of work or has worked for less elsewhere.

The current situation isn’t ideal for those who have worked for one organisation for any significant length of time either. Loyalty to one company is not always rewarded financially, leading to stark differentials in salary expectations when the organisation or the individual enter the job market. If employers are unable to offer an incremental increase in salary (as they don’t know what they’re trying to outbid), would they instead offer what the job demands?

Tackling ingrained bias and practices: simple, right?

Ensuring that men and women receive equal pay for equal work should be achievable but I’m certain it won’t be easy. Whether transparency or opacity is the best way forward, legislating for fairness is not simple. The real-world context of someone joining a new employer or an employer needing to keep a team member from joining a competitor means most employers end up making pay decisions outside annual cycles and performance reviews; answers on a post card please.

Next month Ellwood Atfield is publishing its European Corporate Affairs Remuneration Report, the first of its kind, which will help to shed light on an otherwise dark corner of the market.

Carrie Gracie could have accepted what for her would have been a pay rise, but instead she took a bold step towards a better workplace for everyone and in doing so hastens the pace for us all.

Image by Ronald Bonestroo fotografie/VI Images/PA Images. Maria Thorisdottir of Norway during a FIFA Women’s World Cup 2019 qualifying match against The Netherlands in October 2017.  Earlier that month, the Norwegian football association became the first national FA to agree to pay its male and female international players the same wage.

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