As a retail CEO, you might still be thinking – what do the current problems with sexism evidenced by the high profile, stakeholder value threatening scandals at Uber, the BBC and Hollywood have to do with me?
Retail is arguably the most female-centric sector – interacting with up to 60% of women as employers, and serving up to 80% as customers. In 2017, several leading apparel retailers took commercial advantage of the rise of political sentiment around feminism by selling t-shirts emblazoned with pro-feminist slogans like “We should all be feminists” but how many of the same retailers can say their organisational practices promote gender equality?
The following 2 questions are for retail CEOs to consider. They help highlight their level of commitment to improving gender diversity, and what they might want to consider for their business:
- What are you doing to address your company’s gender balance gap?
- What is your company’s gender pay gap, and have you published your gender pay gap results in line with the recommendations of the UK government?
It’s been over a year since we published The commercial advantage of more women in the boardroom – a call to action for retail leadership teams to be bold and take action to harness the power of diversity to deliver better business results by improving the gender balance gap. We identified 9 recommendations around inclusivity, empowerment and flexibility that could be implemented. One year on, we followed up with our interviewees to find out what, if anything, had changed. The sentiment was mixed:
- 50% of interviewees thought that progress had been made on improving diversity at senior levels in retail, and credited the publicity generated from our report and Retail Week’s BeInspired campaign with increasing the visibility of the gender balance issue in retail
- The other 50% thought there is still more to do, and that change would require much more sustained commitment and effort by all senior leaders
- 66% of interviewees felt that their organisation had made progress in improving diversity at senior levels
- All interviewees are making a personal commitment to be the change they seek in their own organisations by investing their personal time to be mentors, and building partnerships by networking with other women managers across retail.
The latest statistics from UK Retail CEO tracker show an increase in the percentage of retail CEO hires who are women in 2016 – rebounding to 20% from 15% in 2015. A move in the right direction but still far from parity.
“I think we are seeing and hearing more people talk about gender leadership and demonstrate the impact it can have on results but I’m afraid at the end of the day the numbers would say we are not making enough progress quickly enough.”
– Fiona Briault, Director of People, Operations and Partnerships at Pets At Home Vet Group
“I think we have raised awareness, I think we have had the right conversations and we have started to gain a focus and momentum in relation to making sure that females have as much opportunity as males and that we really have a fantastic representation at senior levels across retail.”
– Natasha Adams, People Director, Tesco UK & Ireland
The focus on diversity in organisations is promising but equality needs to be at the heart of organisational processes
2017 brought further support to the gender parity agenda as the Government Equalities Office quite possibly changed the game. Companies with more than 250 employees are now mandated to publish their gender pay gap. Specifically, these 4 metrics:
- Gender pay gap (mean and median averages)
- Gender bonus gap (mean and median averages)
- Proportion of men and women receiving bonuses
- Proportion of men and women in each quartile of the organisation’s pay structure
So what is the gender pay gap? The Office for National Statistics defines the gender pay gap as the difference in median (middle) pay between men and women. It’s vital to note that this is not a measure of direct pay discrimination or equal pay for equal work. It’s an estimator for pay equality at a headline level as the calculation is simple but it does not provide the complete picture. The 4 metrics together do reveal more about the structure of a company’s workforce by gender and reveal in black and white how far companies and entire sectors are from gender parity.
6 months after the Gender Pay Reporting legislation was introduced, just 1% of companies across all sectors had fulfilled this obligation. On 13th March 2018 with just over 3 weeks to go to the compliance deadline of 4th April 2018, 2,000 companies out of a potential 9,000 companies (22%) have filed. A lot to be uncovered in the coming weeks so get ready for the greatest data dump of all time! Analysis of the data reported so far (on 13th March 2018) places the median reported gender pay gap at 10.9% compared to 9.1% taken as a snapshot in 2017. The mean gender pay gap for the 2,000 companies which have filed their results so far is 12.6% – much lower than the 18.1% gap reported by the Office of National Statistics last year. This difference could mean that the companies with the largest gender pay gaps, are the ones who haven’t reported their figures yet.
The 1970 Equal Pay Act made it illegal to pay a woman less than a man for doing the same job – so could the delay in companies publishing their data be because many have realised that they are breaking the law?
The latest data from the European Union benchmarking gender pay gaps for member states, places the UK 4th from the bottom of the league.
Interestingly, the law requires companies to report their gender pay gap figures at a point in time, 31 March for public sector and 4 April for businesses and charities – so could the delay in publication be because many are hoping to publish 2017 and 2018 statistics simultaneously enabling a comparison that will show an improvement offsetting the previous poor results? Or could it be a plan to hide poor results amidst the last minute stampede to disclose?
Initial reports cite financial services as the sector with the largest gender pay gap. It is promising, however, to note that 162 leading financial companies have shown a public commitment and have already signed up to the HM Treasury’s Women in Finance Charter. This aims to build a more balanced and fair industry, requiring signatory companies to publicly report progress against their diversity targets.
According to a recent study by the Chartered Management Institute, female managers in retail are paid 20% less than male colleagues and this gap widens with seniority to an 83% pay gap at C-suite level. The full results for the retail sector might not be available until early April, but now is the time for retailers to form a similar pledge to ensure retail remains an attractive and well-regarded industry.
The latest data from the European Union benchmarking gender pay gaps for member states, places the UK 4th from the bottom of the league. Again, the data speaks volumes. A strong commitment to change is long overdue and there is an opportunity for finance and retail employers to lead the charge in advancing the gender parity agenda.
Retail CEOs: Are you looking at your gender pay gap results and worrying about publishing them?
There are good reasons you should publish your gender pay gap figures:
- It’s the law!
- Hiding a problem doesn’t solve it. No one questions publishing health and safety figures, so why not how you compensate (how you value) your workforce?
- Use your results to identify problem areas in your business and develop strategies on how to improve – what gets measured, gets done.
What excites me most about these latest developments in the diversity agenda is that data is at the heart of the conversation. There’s no room for excuses or supposition, just facts – hopefully this will lead to action.
Retailers can no longer afford to be passive or just pay lip service. The retail industry needs to lead the charge to correct these disparities before 80% of its customers finally realise the power of their collective action. Retail is a fast-paced and action-orientated industry, but there has been little action to create significant change.
As the analysis of the mandatory gender pay gap reporting trickles in, I think it will become vital for organisations to explain the underlying causes of the imbalance in terms of leadership representation and pay to customers, shareholders, staff and potential recruits. More importantly, to communicate what corrective action is being taken. I’m hoping it will spark off important conversations about why a pay gap exists, how we can press for progress in achieving gender parity in representation, pay and progression whilst taking into account the different ways women and men choose to work.
I think it is no coincidence that the widest pay gaps exist in industries that expect longer hours and do not offer flexible working arrangements. Several companies have cited the lack of senior women in their ranks as the main driver of their gender pay gaps which may be true but I’m more interested in what must change in recruitment, promotion and flexible working policies, to address this imbalance. Again, the data should help illuminate this issue and measure progress to parity.
Soon, this will become a competitive paradigm in the war for talent and customers, especially as more and more of us became aware of the power of our choice. I don’t know about you, but I wouldn’t want to do my weekly shop, bank with, or otherwise support a company that I know treats its employees unfairly. This might be a quiet revolution, but customers are savvy and will vote with their wallets.
Whatever happens, it’s a chance to shake up the status quo and that can only be a good thing.