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Defined job families and levels are key to understanding gender pay gap

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In its response to the ‘Closing the Gender Pay Gap Consultation’ from the UK Government’s Equalities Office, Mercer, a global consulting leader in advancing health, wealth and careers, and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), has said that without precise, solid frameworks and clear job definitions, efforts to tackle gender pay disparity in the UK risk becoming confused. 

According to Chris Charman, Principal in Mercer’s Talent business, “The pay gap is as much to do with lower numbers of women in more senior roles – something determined by culture, working practices and recruitment policies – as it is about women being paid less for the same work.  Given that, the publication of high level measures, such as the comparison of average male and female pay, may create noise and only succeed in detracting from the real underlying issues. Success in tackling the gender pay gap starts with ensuring that companies have clarity of understanding and this can be most helped by centrally-defined job families and consistent levels.”

The most effective way of measuring the Gender Pay Gap (while protecting commercially sensitive information) is by reporting pay data by career level on a full-time equivalent basis (i.e. by pro-rating part-time employees). It’s important that companies can compare themselves against similar organisations to give stakeholders context in the sector and to allow them to measure progress over time.  Reporting should be carried out at year end in a company’s annual accounts as reporting dates typically fall outside the busy period for the reward function for most organisations. However, the consultancy doesn’t believe that reporting to the Government via PAYE would be effective since it provides insufficient contextual information.

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