Over recent months the Government Equalities Office (GEO) has been working with a number of organisations to develop a new voluntary framework for gender equality reporting by private and voluntary sector organisations, particularly those with 150 or more employees. The ‘Transparency Framework’ is set out in a paper entitled ‘Think, Act, Report’, which was launched by the GEO at an event hosted by Eversheds on 14 September at which the CBI, Tesco, BT and Eversheds all pledged their support for this best practice approach. A range of other organisations have been involved in the development of the new framework, including the TUC, ACAS, the Engineering Employers’ Federation, the Chartered Institute of Personnel and Development, Opportunity Now, and a number of employers.
To supplement the Transparency Framework, ACAS has published guidance for employers. Together, the Framework and the guidance set out a best practice approach for organisations to analyse their current gender equality position, take action to address any problem areas and report on the state of gender equality in their organisation, including pay gaps (as the GEO puts it, to ‘Think Act, Report’). This voluntary approach recognises the need for organisations to tailor appropriate measures to their own position, not least the size of the organisation and sector in which they operate.
The Transparency Framework
The Transparency Framework identifies a number of alternative ways in which organisations can measure and analyse gender equality information, with suggestions as to the type of organisation each approach is best suited to. Although the initiative very much encourages employers to report their findings, it is not prescriptive about the form that reporting should take.
One of the main drivers behind the initiative is the need to tackle the persistent gender pay gap. To this end, the Framework suggests analysing various aspects of men and women’s pay levels, such as the overall gender pay gap, the full-time gender pay gap or men and women’s starting salaries.
However, the Framework recognises that addressing pay in itself is only part of the gender diversity issue. Thus it goes beyond the idea of looking at pay data alone, suggesting that employers also consider other aspects of the workforce such as the gender composition of the workforce as a whole, or representation of men and women at different levels in the organisation, with a view to identifying opportunities for progression, pipeline issues and barriers within the workplace. The Framework suggests the type of analysis which can and should be undertaken in order to, firstly, identify these non-pay issues and, secondly, encourage organisations to address ways of improving in these areas.
The ACAS Guidance goes into much greater detail as to how, at a practical level, any analysis should be undertaken. It gives useful examples to illustrate exactly what an organisation needs to do. For example, it suggests one way of measuring equality could be to look at promotion rates. This could involve looking at the relative success rates for men and women in particular promotion exercises, or the average length of time men and women spend at each grade and the proportion of men and women from each grade being promoted in a 12 month period.
To illustrate the care that needs to be taken when looking at data, the guidance gives the example of a company that interviews 25 women and 12 men to be managers, and then promotes 10 of the women and 8 of the men. At first blush this shows that more women than men were successful. However, when one looks at success rates relative to the number of applications made by men and women respectively, a different picture begins to emerge: only 40% of women applicants were successful (10 out of 25), compared to 66% of the men (8 out of 12). The difference is significant and therefore warrants a closer look at the recruitment process to ascertain whether there was something about it that unintentionally favoured men.
The proposal is a welcome and important next step which it is hoped will achieve some consistency and give encouragement to organisations. Those already committed to diversity and undertaking such work will probably wish to consider whether their existing approach is in line with this new framework. Many organisations will also be interested to see how their peers are performing.
The GEO has stressed that the initiative is voluntary, with organisations able to choose whether to sign up and how far to go. Nevertheless, those that do nothing could face difficult questions should they ever end up having to defend their practices and policies against allegations of sex discrimination in an employment tribunal. Furthermore, ministers do still have power, under the Equality Act 2010, to make gender reporting compulsory in due course. The GEO plans to review progress over the next four years. If the voluntary approach is not taken up by organisations in sufficient numbers, the government has not ruled out resorting to legislation to force the issue.