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?
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“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’
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..and underlying all this, technology encouraging data sharing and transparency Glassdoor, Linkedin, social
media etc…
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WHATare you hearing?
WHATare your concerns?
Company responses
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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?
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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
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do you think you
will respond to the
regulations?
WHICHareas will you
focus on?HOW
What areas should you focus on?
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Pay
Governance
Talent &
Succession
Communication
& Culture
Equal pay Low pay Gender pay Pay differentials
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What are other companies doing?
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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?
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Short-term Fixes?
Longer-term
strategic changes?Proactive
communications?
If you do nothing else then…
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…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!
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Speaker details
Alasdair WoodDirector, Executive Compensation
Phone: +44 (0) 20 7170 3318
Daniel PuckeySenior Consultant, Talent and Rewards
Phone: +44 (0) 20 7170 2847
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