Date: 03/12/12 Duration: 00:22:53

In this podcast, Dianah Worman, Public Adviser on Diversity and Inclusion at CIPD, Jo Swinson joint Minister for Women and Equalities (DCMS) and Employment Relations and Consumer Affairs (BIS), Margot King - Head of Corporate Responsibility and Diversity for Eversheds LLP , Mark Harrison - Diversity Strategy Manager - Metropolitan and Judith Nelson - Personnel Director for UK and ROI, Tesco discuss Think, Act, Report a voluntary system the Government devised in 2011 that encourages transparency around equal pay and equality of opportunity for promotion.

Philippa Lamb: Britain has had equal pay legislation for over 40 years now but the median gender pay gap is still 20.2%. Now admittedly this can be partly explained by the fact that the vast majority of low paid jobs in areas such as secretarial work and childcare are still done by women but there's also evidence to show that even when they work in better paid professions women generally occupy less senior positions than men and crucially earn less than their male peers doing comparable jobs.

In 2011, in a bid to reduce the pay gap, the government launched an initiative called Think, Act, Report. It’s a voluntary system designed to encourage employers to be more transparent about pay and it’s now in its second year. So I asked Dianah Worman, public policy adviser on diversity and inclusion at the CIPD, why she thinks pay discrepancies are so entrenched and how Think, Act, Report might help.

Dianah Worman: It’s about the ways in which we work women versus men. A lot of the stuff is around what kind of work you do, what kind of work is valued, the way it is valued, whether you’re working full or part time, do you have access to the kind of work that gives the best kind of income? Are you working in a way which entitles you to receive the bonuses which make such a huge difference? Those things actually make the difference between a narrow gap and a wide gap. So if you get the same basic pay it doesn’t mean to say you get the same take home pay. And all those things mount up at the end of the day.

But more pivotal is actually the way in which I think women are judged about the kinds of ways they’re doing their work anyway. Who is assessing them? Who is appraising them? What are the recognising as the important factors in achieving success? Is it the right stuff that they’re measuring and assessing and judging women on or not? Because we all talk about the softer skills that we want now as being very important, the customer service skills, understanding better what the customer wants and that you understand the customer to want. All of those things are very important in terms of your appraisal process and we really need to look at if in fact you've got a pay gap well how are women being appraised compared to their male counterparts? Who is doing that appraising? What are they taking into account and where are the likely problems? So all the time you’re drilling down into your systems about people management and development issues to expose the underlying causes.

PL: Think, Act, Report encourages employers to address issues like these and to really focus on equality. Jo Swinson is Minister for Women and Equalities and she talked to me about the background to this latest push on gender pay.

Jo Swinson: Well obviously the Equal Pay Act of 1970 is 42 years old and yet we still have the situation where there’s a 20% gender pay gap and that's obviously not something which is right and it’s also not something which is good for the economy because women are half the population and we need to make sure we're properly using and recognising their talents in our economy. So the government has an initiative called, Think, Act, Report which companies can sign up to, to make sure they’re properly looking at how they recruit women, how they retain and promote women and also what their pay policies are like to make sure that there's no unconscious discrimination going on and that they’re properly reaping the benefits of the women in their workforces.

PL: The businesses supporting Think, Act, Report range from those just starting to think more deeply about gender equality to those with action plans and reporting mechanisms already in place, what they share is the desire to be more transparent about gender at work. I asked Jo Swinson how many organisations are now on board and whether she feels the initiative is making a difference.

JS: We're delighted that so far 55 employers have signed up to the initiative and that's now covering more than a million people within the workforce, which is a really good milestone, but of course we want to go so much further and that's why I've been encouraging businesses and indeed other organisations, particularly those large organisations to sign up to Think, Act, Report and make sure that they’re properly looking at their processes within the organisation.

PL: I mean as you say 50 plus organisations it’s great, a million employees but what have we got 29 million people employed in Britain right now so we've got a long way to go on this haven't we?

JS: Well we certainly do need to do more on this and I think also to recognise the business benefits of this. This is not just equality, a nice thing to do, this is about sound business sense. This is about making sure that companies can keep their female talent rather than losing them to competitors. We know, for example, when it comes to people returning to work after maternity leave the rates between the best and the worst employers vary from 50% coming back to 99% coming back. Now nobody wants to lose their talented, excellent members of staff and so making sure there’s a really coherent and thought through way of the company looking at how they retain that female talent within the organisation is something which makes perfect economic sense to do.

PL: International law firm Eversheds is one of the 55 businesses which have signed up to Think, Act, Report Margot King is their head of corporate responsibility and diversity and she told me about the gender balance situation there.

Margot King: We’ve historically had a very positive gender balance, the legal sector in general has a very good entry level of women into the profession and like many of our competitors in the sector we've seen that progress through the ranks in the business and we've historically had a very positive representation of women in our partnership. As an organisation that's committed to diversity we've been monitoring that over a period of time and in 2011 we noticed that it was starting to drop and that's where we decided that we needed to do something differently.

PL: So Eversheds set to work and designed a piece of research to find out exactly why the number of women in their business was falling. The study yielded some fascinating results and it helped the firm identify various areas where it believed improvements could be made both in the short and the longer term. Four of them were particularly important. Here’s Margot again.

MK: The first one was around role modelling, we had a lot of good role models in the business of people who had progressed through the partnership, for example, people who’d progressed while working part time but they weren't very well known within the business. So what we've done is really shared those experiences around and done a lot of internal communication to make people aware of the practice that happens in the business but they just might not know about in their particular office or team.

PL: Eversheds now encourages its senior female members of staff who work part time to act as high profile role models to more junior colleagues and reinforce the idea that working part time can be an extremely successful career move. The second area of focus for the firm was maternity leave. It’s a key issue. Before the birth of a first child the employment rate for women is similar to that of men, immediately afterwards it drops off to almost half.

MK: We've been looking at our maternity processes and approach, not just the financial package but that as around a significant review of the processes around maternity to really make sure that we can minimise the impact that taking some time out of the business can have on somebody’s career and that work is something that we're right in the middle of at the moment in terms of how we can really smooth out the impacts that that has, particularly of getting people back up to speed on client work when they come back.

PL: The third area for Eversheds was career planning.

MK: We identified that a number of the more junior women in our organisation aren’t aware of the promotions process and how to go about progressing their career and what that means is that it’s taking them a bit longer to get to the levels of promotion that we’d want them to.

PL: Why do you think that is so the men are more tuned into that?

MK: Yeah I think partly it’s the natural styles that men and women have that men are generally more assertive and will push themselves forward and when you have a promotions process that requires you to put your best foot forward and to demonstrate your capabilities and your achievements men are much more likely to do that and what we need to do is to educate some of the women in our business that it’s okay to sing your own praises and actually you do need to do that and to help them with some of the tools and techniques to go about doing that in an appropriate and honest way but to do it in a way that's right for them but also demonstrates what we need for our promotions processes.

PL: Now Eversheds promotes targeted training for women to support them in this area, for example, by encouraging women to network and, as Margot explained, the fourth and final area in the firm’s equality push was mentoring.

MK: We're just finishing a pilot phase of some initial mentoring relationships, we're taking some of our female lawyers and partnering them with partners in the business, so senior leaders in the business, to really help them through some of those initial decisions and thoughts that they might have about their career and how they progress. So really if you look at the mentoring and the career planning they’re kind of each at the opposite ends of the spectrum.

PL: So having already addressed gender-related issues head on why did Eversheds feel it was also important to get on board with Think, Act, Report. Here’s Margot.

MK: Because it’s common sense. You get what you measure and actually when I was contacted about it it’s what we're already doing so as a law firm we look at our diversity metrics, we think about them, we do something about them and we report on the changes that we see. So although we don’t yet cover all of the elements that are outlined in the Think, Act, Report programme I think we've got some quite good examples of what can happen if you do apply that approach and that's why we were very happy to sign up to it.

PL: What’s interesting here is that companies don’t need to sign up to all of the elements of Think, Act, Report they’re completely free to choose only the bits they feel ready to deal with. Another organisation that's taken advantage of this optional approach is Metropolitan, a national provider of integrated housing services and community regeneration with about 80,000 customers around the country. I asked Mark Harrison, Metropolitan’s diversity strategy manager why he was drawn to Think, Act, Report and which aspects of it he’d chosen to sign up to.

Mark Harrison: It’s fair to say I think that over 60% of our customers are female and over 60% of our staff are as well so it’s very important for us to address any barriers that may exist in respect of gender, both in terms of our role as an employer but also in terms of service delivery. So the report was a good opportunity for us to do some benchmarking.

PL: And are you signed up to all of it or are you just doing some of the aspects of it at the moment?

MH: At the moment we're just doing the top level reporting on our board. We publish figures on our board membership and we're very fortunate to have a woman who’s the chair of our board and the deputy chair is also a woman. The majority of our board members are female and we have 50% of our executive management team are female as well. And if you go down to the directors again over 50% of our directors are women. So we're very positive about the development of women in their career and we’ve participated in The Times Top 50 and I think once we were in there it inspired us to think more about the implications of the Think, Act, Report.

PL: At Metropolitan women were already well represented at all levels but Think, Act, Report encouraged Mark and his team to look at wider gender equality issues in their organisation.

MH: We’ve recently taken a decision to, rather than look at the entirety in terms gender profile, to look at particular teams which is proving much more interesting and actually it will give us some actions I think. We're by no means perfect and we recognise the fact that we can do better on all aspects of equality. I think the first step of that is self-awareness and that's where we are really. But yes we've taken a look at the organisation and we're thinking about appropriate actions and we're doing well I think in certain areas. We do need to think about how we report gender equality I think going forward and we look at organisations like Tescos and think well how can we emulate them in a sense.

PL: Tesco is a brand that will be familiar to everyone listening to this podcast. With over 300,000 employees in the UK and half a million worldwide the retail giant signed up to Think, Act, Report because it supported the work they'd already done on gender pay. Judith Nelson is personnel director for UK and the Republic of Ireland at Tesco.

Judith Nelson: We’d spent a lot of time in previous years trying to equalise the pay of our customer assistants who serve millions of customers every week because why should we pay somebody who moves the trolleys different to somebody who serves cheese on a counter and we had a long journey to try and equalise that pay and then in the early 2000s somebody raised an issue about pay equality of our senior managers and especially around gender. So we took a look into that and surprisingly found that there was a discrepancy.

PL: So that must have been a bit of a shock because as you say you concentrate on this stuff and yet you still discovered there was a bit of an issue.

JN: It was really and on the face of it we were quite surprised thinking well how on earth can that be, you know, it’s something that's part of our core DNA so how could this have arisen and when we looked at it we actually found that there was a 16% discrepancy in the pay of gender in some of our managers.

PL: This is store managers?

JN: Store managers. So we took a look in more detail and what we found is that in the business we have different size of stores, so we have the small Express and Metro and then our larger hypermarkets, the Extras, and in a small store you might be managing 80, 100 people and in the larger Extras hundreds of people, up to 800 and what we actually found is that the majority of the larger stores were managed by male store managers because they'd got more experience with the business. So people start in the smaller stores and then work their way up. So it was purely based on experience and time in with the business and time in role that meant that the male was being paid more than the female store managers and when you did it like for like it was actually less than 2% difference.

PL: So as Tesco discovered gender equality issues can be far more complex and difficult to explain than statistics might suggest at first sight.

JN: People may say, well actually for Tesco it’s easy because you've got 300,000 people and you've got all of the systems and the processes to back it up and of those 300,000 probably most of them are on the same pay rates but we do have over 30,000 people that we look at individually on their pay rates every year and check for any discrepancies around pay.

PL: And despite all the work they’ve done for Judith Nelson it was still important for Tesco to sign up to Think, Act, Report.

JN: I was really pleased and I was quite proud actually when we were asked to really take part and sponsor the initiative with Theresa May last year and I think it’s something that I would encourage all of the businesses to look at and it’s not just about pay it’s about the broader equality agenda and I would say that no matter what sector you’re in, however large or small your organisation, then it provides a real framework for you to start having the conversations with your business about something that's really important.

PL: Now critics of Think, Act, Report argue that in order for it to become truly effective participation should be made mandatory for all employers. I put that point to Jo Swinson, Minister for Women and Equalities. I am wondering obviously it’s a great initiative but it’s a voluntary reporting initiative, will it really address those people who are less alive to these issues?

JS: I think there is a clear business reason to do this as a company but you’re quite right that there are some who are still less enlightened to that particular view. There's obviously lots of things which make business sense to do that we still need a nudge to do, whether that's as a person in your own home knowing that doing loft insulation will save you money on your energy bill but do you really get round to doing it? In the same way I think very many companies actually need that nudge and I think that's what the Think, Act, Report process does. Now of course the government has agreed to go ahead with this voluntary initiative instead of going down the mandatory approach, initially outlined in the Equality Act.

PL: Indeed.

JS: But if this isn’t seen to work then of course businesses will recognise that that's a possibility in future years to come that a government might actually revisit. So I think there's another reason there for businesses to get ahead of the game, to get onboard, making sure that they are reporting on pay, on promotion and making sure that they’re properly using female talent because it’s going to be helpful to their business and because if it doesn’t happen then who knows regulation might be ultimately the answer that a future government goes for.

PL: So what does Dianah Worman of the CIPD think?

DW: We would always say that a voluntary activity is better than coercion. Why? Because you want people to really get it and drive this agenda in a very positive, proactive way. That's vital to really getting the stickiness in the agenda.

Are we going far enough with the current voluntary initiative? Well it’s better than nothing at all to try and encourage employers to communicate what they’re doing in terms of the diversity agenda, what they’re achieving and perhaps getting them to do this by enabling them to do it in a way that they’re comfortable. But what is a problem is if they are not actually being given a selection of things that are really meaningful in order to select from. So if you don’t put enough emphasis on the issue of pay and reward then it’s almost a bit of a cop out. Now you can communicate pay if you choose to but you may elect not to and if you don’t do it then you’re not putting out into the public domain enough information to make what you’re doing transparent and to really expose you to the kind of scrutiny you should be exposed to in order to pull your socks up.

PL: And other countries have legislated haven't they and set targets?

DW: They have legislated and they’ve set targets, whether they achieve success or not remains to be seen because even if law kind of seems to fix the problem at a superficial level it’s really what’s underneath the tip of the iceberg that's important.

PL: So you think things like setting targets for female board members, that sort of thing, doesn’t really address the core issue?

DW: I think you’ve got to be very careful that you don’t go down the line of the quota system and that was never really ever intended even when the Americans first introduced their plans for progress. It was you've got to connect with what you’re trying to do because if you don’t connect with it how are you going to achieve it? I mean it could be aspirational for sure but if it’s imposed it’s almost immediately creating negativity which is not good for change at all.

PL: At Eversheds Margot King takes the view that encouragement rather than coercion will achieve the best results in the long term.

MK: I think the approach that the GEO is taking in terms of encouragement and explaining why is going to get much more engagement with the benefits and to understand the benefits of doing it. I think you get more positive action on the back of that than if you mandate people to do it. The range of organisations and the range of sophistication that you have is so vast that I think if you mandate it what you won't get is the Think and the Act, you'll get the Report.

PL: So you wouldn’t get the culture shift.

MK: And actually it’s the Act that's going to add value and make a difference in gender equality in the UK and if you mandate the report I think all you'll do is drive the Report and you won't get the Think and you won't get the Act.

PL: And here’s Judith Nelson from Tesco.

JN: The one thing I would say it’s voluntary so what I would encourage people to do is literally to start talking and having those conversations with your CEOs, with your business leaders and actually if you don’t want to report it, if pay isn’t the first thing that you want to report, then all I'd say at least take a look at it because it will either give you some confidence that actually everything’s okay, or not, it’ll give you an opportunity of something to address over a period of time.

PL: Earlier in the podcast we heard Women and Equalities Minister, Jo Swinson, talking about the clear business benefits to be had from addressing gender equality, Mark Harrison at Metropolitan and Tesco’s Judith Nelson agree.

MH: Probably the most immediate benefit that we see is that the people who, women who are applying for jobs with us and that's a key priority for us as an employer is to be an employer of choice for all people and we've had some excellent new recruits to our organisation in the last couple of years and I would say that our approach to gender equality and equality in a broader sense has been part of the attraction to people.

JN: Gender equality for us is really important like it is for most businesses. So we're a retail business, 85% of consumers in the UK are women, 22% of women shop online and over 90% of those talk about it to their friends and family. So from a brand perspective it’s really important and I think just being able to provide opportunities and having a real broad range of skills and experience in your business is just really important.

PL: That's it for this month. If what you've heard has tempted you to find out more about Think, Act, Report and how to get involved with it take a look at the show notes where you'll find more information and all the links you need.

Next time in the first podcast of the New Year I'll be talking to Peter Cheese, Chief Executive of the CIPD. He’ll be looking ahead to 2013 and talking about his hopes and plans for the institute and the profession. Join me then