Could increasing remote working risk worsening your gender pay gap?

August 18, 2022
Gender pay gap

Obviously many people benefit from remote and hybrid working, it’s not just about women, but I don’t think it’s too controversial to state that women are still more likely to have caring responsibilities, and are therefore still more likely to be keen to be able to work flexibly and/or from home. And there’s plenty of argument that increased flexibility and remote working are good tools to reduce the gender pay gap. But something that seems, on the face of it, to be a positive initiative for those employees may not be quite as helpful when it comes to how much they are paid.

Gender pay gap is about average hourly rates in an organisation, rather than equal pay (which is about being paid the same rate for the same job, or for “like work”). So will allowing or encouraging flexibility, hybrid working and remote working help reduce the average hourly rate differential?

Organisations who promote or allow this type of working might certainly be more appealing to female job applicants, or might find those policies more likely to be taken up by existing female staff, so recruitment and retention of female staff could well be something you’re finding improving if you’ve implemented these things recently, as many organisations have done coming out of the pandemic.

But retention across the board doesn’t mean retention in a wide range of roles, and retention isn’t the same as promotion. Where a gender pay gap becomes marked is where an organisation has a disproportionate number of men in higher paid roles, because it increases the discrepancy between the male and female averages. Therefore, whilst increased flexibility and remote working might help retain your female staff, whether it helps with your gender pay gap depends on what roles these women you are retaining are doing, and whether they have equal access to promotions.

Many organisations see the lower-level roles as being more suited to remote working – as long as the productivity mental block some managers have is overcome – and still perceive that managerial/leadership roles need to be more ‘present’ and visible at the workplace. Therefore it might be more likely an organisation will agree to remote working or hybrid working on those roles it deems less important.

Similarly, in many organisations, networking and visibility and moments at the kettle/water-cooler/pub are crucial when it comes to promotion decisions, either consciously or subconsciously, so women who are not visible around the workplace as much may well find that promotions don’t come their way.

And what about equal pay, is there also a risk there? Well possibly. Because equal pay relates to equal roles or “like work”, if you pay staff the same regardless of whether they work at home or in the office, you should be fine. But it still needs keeping an eye on. Just the same as promotion decisions can be influenced by visibility and networking, pay decisions can be too, so you need to watch there isn’t a drift as salary decisions are made, either on an ad hoc basis, as part of an annual review, or when recruiting.

Some organisations have been open about deliberately paying staff less who are working remotely, presumably on the basis that working from home rather than the office will be a material factor justifying that decision in the event of an equal pay claim. Certainly location can be a material factor – having a London Weighting, for example, is commonplace. But material factor defences won’t stand up if they are indirectly discriminatory, and I think there is a risk that a blanket decision to pay less for staff working from home will be challenged on that basis.

So if you’re encouraging, or allowing remote and hybrid working, and flexibility generally, continue to do so, but also consider whether this is being applied across the organisation (having some key very senior people working remotely or part time can work wonders in terms of setting the tone and giving ‘permission’ for all types of roles to work flexibly), and ensure that, culturally, promotion and pay decisions aren’t being made on an unfair basis and causing your gender pay gap to drift. And think very carefully when advising any senior managers who want to operate reduced pay for homeworkers, and make sure they are aware of the risks, both in terms of legal claims and also in terms of perhaps not being as successful when it comes the retention goals they might have been hoping to achieve when implementing remote working in the first place.

 

If you’re interested in talking to us about becoming a partner with face2faceHR with bags of support, do get in touch.