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At a recent roundtable held by HR Grapevine and Brightmine, industry professionals across ED&I, pay analytics, and reward came together to discuss the potential challenges facing employers who, according to plans laid out in July’s King’s Speech, will soon be required to report not just on gender pay data, but also on ethnicity and disability data.
Ahead of the implementation of such legislation – coupled for multinational employers with the likes of the EU’s Pay Transparency Directive – these challenges ranged from wider difficulties in building a contract of trust with employees and giving senior stakeholders a genuine ‘business case,’ down to practical problems such as the framing of specific questions that ask employees to self-identify with a disability or with a race or ethnicity.
Some of those broader challenges have been a part of the conversation for many years around pay gap reporting, for which there is no easy answer. How can we transparently show employees the action being taken? What if our leaders don’t ‘get’ why this matters beyond box-ticking or legal compliance? And who should hold ultimate accountability for progress around narrowing the gender, ethnicity, or disability pay gap?
The chicken and the egg: Moving from dwindling disclosure to meaningful action
Answering those questions, including how to improve data disclosure around ethnicity and disability, can feel like trying to address the chicken and the egg conundrum. Without sufficient disclosure, meaningful action becomes difficult; causing more hesitancy from employees who cannot see the value in sharing their data, or even fear the potential repercussions of doing so on their job, career, and chances of progression; making it hard to improve disclosure rates; without sufficient disclosure, meaning action becomes difficult… and so on.
Employers battling to break this familiar cycle may wish to consider:
1. What practical changes could improve data disclosure rates?
Even small changes to the content, timing, and delivery of data collection could make a major difference in disclosure rates. Consider how questions could be re-structured or re-worded to help employees feel more confident in responding, indicating how their responses will translate into action. Or, for example, making a question mandatory but adding in a ‘prefer not to disclose’ option.
Timing-wise, clearly specifying when employees will complete such a survey – remember in some industries this could be months or even years in advance – can make sure managers have blocked out the time for their team to participate; and even line up a task to complete the survey to coincide with other regular points at which employees may already be visiting their HR information system (HRIS), such as an engagement survey, can make disclosure more practical for employees.
2. How can employers build trust through meaningful action?
Resist the temptation to see annual gender, ethnicity, and pay gap reports as the solution to the problems they are designed to reveal. Instead, they are a starting point, keeping employers to account each year with ongoing progress, however gradual it may be.
Use surveys as a springboard for further action, bringing together a range of stakeholders across teams including HR, DEI, pay, and reward; people managers; representatives from employee resource groups (ERGs); and internal communications. Get clear on the shared responsibilities of each department, including what success over a timed period will look like, and how any actions are designed to move the needle on pay gap reporting over time.
Executive or business leader sponsorship of these coalitions is critical, so gaining buy-in – whether that be through highlighting the (legal) risks of failing to address pay gaps or the benefits of progress to the business (beyond the ‘it’s the right thing to do’ argument which can fall flat in boardrooms) – should be emphasised at the beginning of this journey.
A good place to start is with executives who are comfortable disclosing their ethnicity or disability with the company. Their participation in communications around pay gap reporting demonstrates the company’s commitment to a culture of openness and builds psychological safety in less senior employees.
3. Why is effective internal communication so integral to closing pay gaps?
Following on from the need to build trust with action is the need for effective communication – hence why internal communications team members are a vital part of any cross-team coalition on pay gap reporting.
Top-line reporting on gender, ethnicity, or disability only tells a very small part of the story. Communication around the company’s journey to close pay gaps must be brought to life.
Just as important as any statistic contained in a pay gap report are the stories that embody how that data is being used effectively. Beyond reports, using formats such as video and other multimedia to show what action is being taken can engage employees with this journey and make it contextual to their role, team, division, and even country.
Finally, remember that effective communication is authentic and transparent. Use the data to introduce or update policies and programs that impact positive change. If employees see tangible results, they will reciprocate greater transparency.
Be open about the current state of your business’ gender, ethnicity, and disability pay gaps, and get clear on what you plan to do about it. Even if progress is slow, trust can be built if employees understand who is accountable and how the impact of their actions will be assessed.
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