Friday6 March 2020 ★ FINANCIAL TIMES 3

Contributors

Laura Noonan

US banking editor

Harriet Agnew

News editor, financial services

Laura Hughes

Political correspondent

Laura Pitel

Turkey correspondent

Federica Cocco

Statistics journalist

Sam Smethers

Chief executive, Fawcett Society

Isabel Berwick

Editor, Work & Careers

Natalie Whittle

Development editor, FT Weekend

Zak Garner-Purkis

Head of content, Construction News

Kana Inagaki

Tokyo correspondent

Kate Hodge

Freelance journalist

Harriet Arnold

Commissioning editor

Steven Bird

Designer

Esan Swan

Picture editor

For advertising details, contact:

Carol Ramsey, +44 (0)20 7873 3600,

[email protected], or your usual

FT representative.

All editorial content in this report is

produced by the FT. Our advertisers have

no influence over or prior sight of the

articles.

I realised I had walked into a problem

of my own making while talking to a

smart younger colleague about the

things that need fixing in workplaces.

Number one on my list for 2020, I said,

is equal pay — or the lack of it.

I told her I had been on stage at a

professional women’s event recently,

talking about the effectiveness — or

otherwise — of the newest ideas to help

advance our careers. The best “hot

trend” is pay transparency, I had

suggested to the 200 assembled

women. Employers are supposed by

law to give men and women equal pay

for equal work. But how do we know if

we are being paid equally? Telling each

other what we earn is a good start. And

knowing what your colleagues earn is

also powerful data to have for pay

negotiations.

Anyway, I aid, what have we got tos

lose by being honest and less, well,

British? Who is this mertao helping?

Employers.It is liberating to be open

with our friends and colleagues. And so

I went on and on, delighted with my

bravery and openness.

After patiently listening to all this,

Smart Younger Colleague was direct.

“So, would you be willing to tell me

how much you earn?” I was shocked.

Maybe I had not realised that actions

have consequences, despite repeating

this phrase to my 16-year-old son with

wearying frequency.

Still, I admired SYC for asking. So I

told her. Then she told me her pay, and

we both gained a bit of knowledge. (No,

I am not going to repeat my salary

here. Or hers. There are boundaries.)

Such“radical pay transparency” s ai

relatively new term for a revolutionary

sounding practice that has long gone on

in whisper networks, among friends at

work, and more recentlyas part of a

wider cultural shift to more sharing

and openness, especially amongfemale

friends.

Ten years ago I told no one except

my husband what I was paidand no

one told me. Now it is more common,

becoming rapidly less stigmatised —

and men are joining in. Even my father

tells me what his pension income is.

Mutual truth telling about salary

works best with colleagues you know

and trust, and whose jobs are

reasonably analogous to your own. It is

also useful for freelancers and people

working in the same sector, to gauge

day rates and for salary negotiations.

There are downsides to sharing. Our

salaries are intimately connected to

our self-worth. How will you feel if you

turn out to be extremely low-paid

compared to your peers?What if that

information is used against you in

some way? What if — as one woman at

the event suggested to me afterwards —

your hard-negotiated salary is used to

bump up a lazy colleague’s pay?

If you do go in for transparency, be

careful. Prepare the ground, and

address only colleagues you know well.

Some people overcome their

inhibitions enough to offer one-way

disclosures to colleagues and friends

who do not want to talk about their

own pay — this is, after all, a delicate

topic and reciprocity is not a given.

Be prepared for big discrepancies,

especially in workplaces where pay

decisions are opaque, and which do not

have banded salary levels. Some

companies ban employees from

sharing salary information: there are

instances when this can be overruled,

but check before you talk.

If you feelyou may have an equal

pay complaint,you will need to know

the salary of a “comparator” —

someone of the opposite sex doing

equal work. This may not be easy to

find out.

The Fawcett Society, a UK charity

campaigning for women’s equality,

wants the legal ight to know what ar

male peeris paid (see below). Fawcett

is correct: we need structural change to

force pay disclosure. Leaving it to

individuals to take the leadis a

powerful disincentive to action (but

that is, of course, the point).

A good introduction to what makes a

successful equal pay claim — and a

riveting read in itself — is the tribunal

judgment in the presenter Samira

Ahmed’s recent case against the BBC.

Reading about thehoops she had to go

through — and her employer’s

extraordinary responses — makes one

realise that challenging your pay in

public is no light undertaking.A public

tribunal judgment usuallycomes after

years ofwork during which internal

grievance procedures and mediation

have been exhausted.

We should be mindful of risks, but

there are many upsides to sharing —

you may even be pleasantly surprised

at what you find out.Collective

paranoia around pay can be intense,

demoralising and divisive in a

workplace. Shining a light on it might

be cleansing and even cathartic.

Let me know if you give it a try.

Let me tell you what I

earn... but not here

OPINION

Isabel

Berwick

We should be mindful of

risks, but there are many

upsides to sharing —

you may even be

pleasantly surprised

Women in Business

I

f more employees knew what col-

leagues were paid, would the gen-

der pay gap narrow?

Disparities between women’s and

men’s pay persist at least in part,

say experts, from campaign groups to

academic researchers, because they are

cloaked in secrecy.

They argue that the small but growing

trend for making information about sal-

aries public could be the catalyst that

hastens greater pay equality between

genders.

Pay transparency — in which employ-

ees’ compensation is revealed inside,

and possibly outside, the organisation —

creates an impression of fairness and

openness, making it easier to deal with

allegations of sexism. But others fear

that such openness could lead to ruc-

tions and envy.

Employers that do already practise

some form of pay transparency tend to

be smaller — such asSpiber, abiotech

business in Japan — or operate in the

public sector (see chart). Most disclose

salary ranges — pay bands — for certain

roles, but others such as US social media

companyBuffer, ake a more radical ap-t

proach to reveal the figures in more

detail.

Transparency is the future for pay

negotiations, says Scott Torey, chief

executive of Seattle-basedPayScale,

which makes software for employers to

manage compensation data.

“Both employers and employees will

openly share objective, market-based

data to agree on compensation,” he

argues. “Already, more employers are

using compensation data to price their

talent fairly and, similarly, more

employees know what they’re worth

when they go to the negotiating table.”

Some forms of pay transparency can

backfire, points out Sudarshan Sam-

path, data research manager at Pay-

Scale. Pay bands can still lead to “pricing

the person and not the job title”, he says.

That would mean “unconscious bias can

still creep in”.

In PayScale’s view, fairness will result

when pay for jobs isdynamically priced

— in accordance withsupply and

demand, rather than relying on level-

ling ranges.

There is evidence, however, that more

modest forms of transparency have an

effect. In the 1990s, the Canadian prov-

inces of British Columbia, Manitoba and

Ontario introduced disclosure laws

requiring universities to report the sal-

ary of any employee earning more than

C$50,000 per year — $100,000 in the

case of Ontario (see chart).

Recent research nto what transpiredi

found that the law helped narrow the

male-female salary gap by about 30 per

cent, thanks mainly to higher female

salaries.

In January members of the European

Parliamenturged the European Com-

mission o consider binding provisionst

for pay transparency for the public and

private sectors, as part of EU measures

to help achieve equal pay for equal

work. A number of countries have intro-

duced much less dramatic forms of

transparency. In the UK, for example,

companies with at least 250 employees

are mandated since 2017 to disclose

their average gender pay gap.

Despite this, “women still find it

really challenging to access the infor-

mation they need [in order] to know

whether they are being paid equally [to

men]”, says Gemma Rosenblatt, head

of policy and campaigns at the Fawcett

Society, a UK women’s rights organisa-

tion (see below).

While there is broad agreement that

pay transparency is beneficial to female

workers, a2018 study in Denmark

found that pay transparencyled to

slower pay growth for male employees.

This is backed up by esearchr into the

effects of pay transparency on hiring

and bargaining carried out by Zoë Cul-

len,an assistant professor at Harvard

Business School. It encourages employ-

ers to “bargain aggressively with the

highest earners”, she says, and they

happen to be mostly men.

At the same time, making salaries

public could potentially protect compa-

Would making

salaries public

help end

disparities?

RemunerationAdvocates for pay transparency say

it would close the gender pay gap. ByFederica Cocco

Need to know: women seek information to ensure equal treatment— Getty

Separate report on ft.com

Women at the Start

3 Why work is a culture shock for new

graduates with high expectations

3 Tips on budget-planning and how to

manage your money

3 Mental health at work: avoid burnout

and rediscover your creativity

3 Learn new skills and develop your

career with a side hustle

3 How to banish self-doubt and be

more confident in front of colleagues

3 Early career-planning versus going

with the flow: which is best for success?

http://www.ft.com/women-start

Legislation to mandate pay equality for

women and men is decades old in

countries including Iceland, the US and

the UK, which marks 50 years since its

Equal Pay Act this year. Yet

misunderstandings ersist, leading top

myths that need repeated debunking.

What is the difference between the

gender pay gap and unequal pay?The

gender pay gap is the difference in

average hourly rates of pay between

women and men. It can be calculated

as a median or mean average figure

and on full-time or part-time hourly

pay. The gender pay gap reflects: the

fact that women are under-represented

in senior, better paid jobs and over-

represented in low-paid work; hey dot

the majority of unpaid care work so

they tend to work fewer hours for some

of their career, which undermines

career progress; they are concentrated

in lower paid sectors while men

dominate higher paid sectors; and, ni

some cases they are paid less for doing

the same or similar work as a man.

Because the gender pay gap is an

average figure it cannot tell you ifpay

discrimination between individuals is

happening. This — unequal pay —is

where women and men are paid

differently yet they do the same job

(“equal work”), a job rated as

equivalent, or work of equal value.

An organisation can have a small

gender pay gap,but that maydisguise

pay discrimination between some

women and men doing similar jobs.

Surely women and men are paid the

same for he same job these days?t

We know from dozens of women using

the Fawcett Society’s equal pay advice

service, and from high-profile equal-

pay victories, such as presenterSamira

Ahmed’s gainst the BBC, that paya

discrimination is much more common

than you might think.

The majority of cases the Fawcett

service sees concern the “equal work”

type. Women often do not know what

male colleagues are paid and re not ina

a position to challenge pay inequality.

Talking about pay at work is still a

taboo, or discouraged in employment

contracts (whichis unenforceable in

the UK). That is why Fawcett is calling

for the “right to know” to give an

individual an enforceable right to know

what a colleague is earning if they

suspect unequal pay.

It is important to recognise, however,

that different rates of pay are not

always down to discrimination. UK law,

for example, says it is possible to pay

women and men differently but there

must be an objective justification such

as level of responsibility or particular

skills or expertise needed.

How can two completely different

jobs be valued equally?When we

attribute a salary to a role we are

making a statement about value.

Sometimes that is determined by what

we perceive to be the going rate,

historical factors, or where a role

features within a pay band or on a

particular point on a pay scale.

But we often fail to question why one

role, when dominated by women,

should be paid less than another, when

dominated by men. Then, when

challenged, it does not hold up to

scrutiny. This is why, in the Glasgow

City Council equal pay case, care

workers and nursery workers were

successful ast year in claiming equall

pay with refuse collectors.

Women are not undervalued, they

just choose to work in lower paid jobs.

Research hows that where womens

move into male-dominated sectors, the

pay falls. This suggests it is women

themselves who are undervalued

rather than the role.

In addition, npaid care andu

domestic work are still overwhelmingly

done by women, so paid jobs that

resemble those roles are similarly

undervalued. Women often reduce

their hours o combine paid work witht

caring, whether for children oradults.

Because part-time work is often

lower paid, women are trading down

their earning power and often working

below their skill levels — which affects

the development of their careers.

The pay gap is a myth: it is all about

women’s choices.The pay gap is real

and is the result of structural

inequality.It represents a productivity

gap because it reflects an underuse of

women’s skills and expertise. Girls

outperform boys in education but this

does not translate into the labour

market inthe earning power of female-

dominated roles nor in terms of them

fulfilling their potential throughcareer

progression.

The problem is women just do not

ask for more money.Evidence uggestss

that women, particularly younger

women, are as likely as men to ask for

more pay, butmore likelyto be turned

down. He is thrusting and ambitious,

she is pushy and annoying. It all comes

down to gender stereotypes that we are

exposed to throughout our lives and

the roles we are all conditioned to play.

The writer is CEOof the UK Fawcett Society

Six stubborn myths about equal

pay between men and women

OPINION

Sam

Smethers

nies from the costs of pay discrimina-

tion claims, points out ngela CornellA ,

director of the Labor Law Clinic at Cor-

nell Law School, by “minimising the risk

of disparate treatment claims”.

Pay transparency is likely to become

more common as the trend for workers

to post information about their salary,

role and workplace online grows.But

“the form that it will take is more likely

to be anonymous”, Prof Cullen says.

“Third party sites like Glassdoor...

have made it very clear that there is

demand for this type of information,”

she adds. It would be hard to stop them

from gathering and publishing such

information.

Countries with some form of pay transparency have

smaller gender pay gaps

Dierence between men’s salaries and women’s salaries as a  of men’s salaries

( or latest available), employees only

   

South Korea

Full

Pay transparency

Partial

Japan

Israel

US

Canada

Finland

UK

Germany

Iceland

New Zealand

Sweden

Norway

Ireland

Denmark

Belgium

Sources: OECD, European Commission “Pay transparency in the EU”, FT research

Canadian universities’ gender

pay gap narrowed after pay

transparency law

Change in gender pay gap (percentage

points) from year of reform

-

-

-



-------

Reform introduced

Source: Baker, M. et al (National Bureau of Economic

Research), Nov 

Pay transparency is more

common in public sector

 of respondents



Government/public sector

Insurance

Not-for-profit

Banking/financial services

Mining/metals

Energy

Healthcare

Consumer goods

Life sciences

Retail

High tech

Manufacturing

Chemicals

Transport

Open communications

Communication on request

No communication

Source: Mercer US Compensation Planning

report /

MARCH 6 2020 Section:Reports Time: 3/3/2020- 18:12 User:harriet.arnold Page Name:WAB3, Part,Page,Edition:WAB, 3, 1