In this article co-authored by Sam Gordon, Sophie Eden, co-founder of Gordon & Eden, explains what tech entrepreneurs need to know about gender pay gap reporting.
Earlier this month, the UK government took a noticeable step towards addressing the balance of power in this country. Not the snap election announcement, but rather the new beginning of Gender Pay Gap Reporting.
This legislation requires companies with more than 250 employees to report their gender pay gap across salaries and bonuses. There is no carrot or stick, just increased transparency around an issue that has caused controversy and anger for decades.
The topic of gender tends to bring with it centuries of theory surrounding ongoing discrimination and emotional opinions. While this is something we feel very strongly about championing, it’s important to remember that gender equality has a business case as well as a social case. There is a massive opportunity for companies to tackle this issue head on to enhance their brand – tech companies in particular.
The potential for tech companies
Gender inequality has been a prickly issue for tech companies in recent years, from Uber to Tinder. Casting a spotlight on these issues might seem daunting, but it is something that they should relish. McKinsey research shows that eliminating gender inequality could add $12tn to global GDP in a decade, and productivity has always been a religion for tech entrepreneurs and digital leaders.
The development represents a potential call to action for tech companies to reduce discrimination and showcase their diversity to the world. The fact that legislation calls for greater transparency rather than compelling a change of process is important. The executive tech leaders we work with abhor red tape, but the potential upsides in brand, productivity and winning talent battles should pay dividends many times over.
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An opportunity to build a brand
Technology is one of the only industries where youth is no barrier to success, and time and again we learn the value that younger generations place on social purpose. Leadership teams across all industries are aware of the war for digital talent, and desperate to find anything that might give them the edge when attracting tech talent at all levels, including the boardroom.
Rather than seeing reporting as a legal requirement, these companies can seize on this opportunity to hold themselves to higher standards of participation for underrepresented groups. Finding the right fit for a superstar is no longer about salary, but takes into account autonomy at work, opportunities for growth, work culture and even a company’s strategy.
Many modern workers are motivated considerably by a company’s mission, so turning a regulatory requirement into the seeds of a unique social purpose can attract greater interest from individuals from all backgrounds.
How to make it work
The first step to building a diverse and inclusive brand is to identify the pain points that prevent effective diversity. When we speak to C-suite teams about this, it’s rarely as simple as increasing salaries.
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Achieving gender diversity can mean more radical changes such as offering flexible working, and proactively recruiting returning mothers. Improving cultural diversity means ensuring networking does not always revolve around alcohol, or asking employees form minority backgrounds to play a leadership role in recruitment by acting as a role model and showing that the existing staff is not homogenous.
It is important that employees are judged by their talent and contribution, but it is equally important that companies show through themselves as being accepting and welcoming of diversity.
The key takeaway is that building a culture of inclusion is not always easy, which is precisely why it is so valuable.
The most important thing when building a culture of inclusion is that it derives from solid processes, rather than well-intentioned words. This all comes back to transparency and honesty, two principles more important now than ever.
Gender Pay Gap reporting isn’t going to cause a revolution in workplace affairs, but it can provide inspiration for companies that wish to set themselves apart and in our experience of working with top digital talent, that can make all the difference.