Ingrid Waterfield, a director in KPMG’s People Powered Performance practice (P3), comments on news that, from today, employers can be compelled to conduct and publish equal pay audits if they are judged to have breached the equal pay provisions of the latest Equality Act. She argues that while the principle of transparency is a good idea, forced publication of numbers will do little to explain pay gaps, or address cultural issues within organisations.
Ingrid says: “In the forty years since the first Equality Act was passed, not enough attention has been given to pay. While the glass ceiling may be showing the first signs of cracking, equal earnings remain the elephant in the room – whether this is an office or on a factory floor."
“Equal pay audits should be welcomed as another step on the path to transparency in business but, while the threat of forced publication of pay structures might shame some employers into action, it will not solve problems over night."
“The fact is that numbers, alone, mean nothing and cannot be compared. They might show who earns what, but this knowledge will do nothing to address the fundamental cultural issues that still need to be tackled. Instead, better communication on how decisions are made is vital to help employees understand why they are paid what they are. It is also often down to inconsistencies on the part of line managers that leads to discrepancies in pay so it is just as important to ensure decisions are based on pre-agreed criteria, rather than personal relationships, especially where performance related pay is concerned."
“And if a set of rules are harnessed to the power of data analytics, these decisions can be monitored, evaluated and brought into line. The end result will be a greater chance that equal pay for an equal day will become the norm.”
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Notes to Editors:
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.