What to do if you are being asked more and more about fairness and pay

NOVEMBER 2016

What to do if you are being asked more and more about

fairness and pay

© 2016 Willis Towers Watson. All rights reserved.

Alasdair Wood and Daniel Puckey

What are people saying about pay fairness?

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“Not equal”

“Not enough”

“Not fair”

Where is the pressure coming from?


“Tackling the gender pay gap

is an absolute priority for this

Government”

- Minister for Women and Equalities

18.3%

The gender pay gap in 2016

- ONS

129%

Average pay ratio for

FTSE100 CEOs in 2015- High Pay Centre

Only half of employees

think they are paid fairly

in the UK

– 2016 WTW TMR survey

“Whopping pay awards to senior

executives are .. vastly bigger than

workers could ever expect to receive”

- Chair of BIS Select Committee

More than 1 in 5 employees

(6.3 m) were paid less than the

voluntary Living Wage

- Resolution Foundation

2011 Lord Davies Women on Boards

Review

2016 Gender Pay Reporting

Regulations

2016 Women in Finance Charter

Low Pay

1998 National Minimum Wage

2001 Living Wage Campaign

2016 National Living Wage

2008 Directors’ Remuneration Report Regulations

2009 High Pay Commission

2013 Update Directors’ Remuneration Report disclosure requirements

2016 BIS Inquiry, IA Guidance

Equal Pay

1968 Ford Machinists Strike

1970 Equal Pay Act

1975 Sex Discrimination Act

2010 Equalities Act

Gender Pay Reporting Pay Differentials

2016: ‘the perfect storm’

4

..and underlying all this, technology encouraging data sharing and transparency Glassdoor, Linkedin, social

media etc…

© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.


WHATare you hearing?

WHATare your concerns?

Company responses


COMPANY RESPONSE

Equal Pay

Focus on meeting regulatory

requirements and minimising

any risk to the company

Make use of external pressure to

address internal reward/ talent

weaknesses for benefit

of business

Compliance-driven

approach

Company-driven

approach

Low Pay Gender Pay Pay Differentials

What is the business case for going further than compliance?


Legal risks of gender pay gap

transparency

Reputational risks

Individual executive

accountability

Impact on employee deal

Competitive advantage Improve attraction, retention and engagement

Improve company performance


do you think you

will respond to the

regulations?

WHICHareas will you

focus on?HOW

What areas should you focus on?

9

Pay

Governance

Talent &

Succession

Communication

& Culture

Equal pay Low pay Gender pay Pay differentials

© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

What are other companies doing?


Set out ambition for half its

workforce to be female by 2025 –

17% of staff are female today

The bonuses of the most senior

staff are to be partly linked to

achieving a 3% increase in the

female staff each year.

CEO stated that there had been

unconscious bias in the industry

and that women had been

disadvantaged. In the company’s

“most inclusive and diverse sites”

performance is 15% higher

ABI Set target for gender balance

(50:50) internal promotions

to manager

Also, 50:50 long list for

external recruits to manager

Target 50% return from

maternity leave

BHP Billiton

What actions have you taken or do you plan to take?


Short-term Fixes?

Longer-term

strategic changes?Proactive

communications?

If you do nothing else then…


…ensure you understand your position (in terms of government gender pay

gap reporting legislation, equal pay risks, CEO pay ratio, impact of NLW )

Measure yourself against your peers

Do a ‘dummy run’ of your statistics before

legislation is enacted so you have a benchmark

Make executives aware of the impact and the

personal accountability

Once you know your position, assess the

reputational impact

Decide what you need to do to understand and fix

any issues you have – to gain competitive advantage!

© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers W atson client use only. 13

Speaker details

Alasdair WoodDirector, Executive Compensation

Phone: +44 (0) 20 7170 3318

[email protected]

Daniel PuckeySenior Consultant, Talent and Rewards

Phone: +44 (0) 20 7170 2847

[email protected]

What to do if you are being asked more and more about fairness and pay

Business

Transcript of What to do if you are being asked more and more about fairness and pay