A new pulse survey conducted by 3R Strategy - a reward consultancy - has shed light on the state of equal pay audits and pay budgets in organisations across the UK. The survey, which collected data in March 2023 from HR professionals, reveals concerning statistics regarding the completion of equal pay audits.
The survey found that over half of the organisations surveyed (51%) have never conducted an equal pay audit. This finding is particularly worrisome considering that ensuring equal pay for equal work is a legal requirement under the Equality Act 2010.
Rameez Kaleem, the Founder and Manager of 3R Strategy, expressed his concern about these figures and emphasised the importance of equal pay audits. While not compulsory, he advised organisations to conduct an equal pay audit at least every three years to identify and eliminate pay inequalities.
In addition to the lack of equal pay audits, the pulse survey also highlighted the issue of pay transparency. Only 12% of the survey participants reported publishing salary ranges for employees to see. Among those who did not publish salary ranges, various reasons were given - including concerns about potential reactions, the need for effective communication and training, lack of confidence in the current ranges, and the absence of salary ranges altogether.
Pay transparency plays a crucial role in encouraging equal pay and improving employee relations, according to Rameez Kaleem. By being clear and open about how pay decisions are made, organisations can highlight fairness and equity, providing reassurance to employees that they are being treated fairly and not subject to undervaluation or discrimination.
The survey also explored the presence of a career framework or job architecture within businesses. A complete job architecture establishes a set of bands that ensure fairness and consistency in pay, bonuses and benefits. The results showed that 49% of organisations lacked a framework, 14% had a framework but no definitions and 37% had both a framework and definitions. A well-defined job architecture is essential for determining pay and conducting an effective equal pay audit.
Jemima Olchawski - Chief Executive of the gender equality charity the Fawcett Society - commented on the survey findings, stressing the importance of understanding the causes behind pay gaps. While reporting on the gender pay gap is a legal requirement, she stressed that employers should go beyond reporting and take action to address the gaps. Pay audits play a vital role in identifying and rectifying pay disparities, not only based on gender but also considering the impact of ethnicity on pay inequality, particularly affecting women from Black and minority backgrounds.
The pulse survey conducted by 3R Strategy provides valuable insights into the state of equal pay audits, pay transparency and job architectures in UK organisations. The findings highlight the need for businesses to prioritise equal pay audits, establish transparent pay processes and develop comprehensive job architectures to ensure fairness and equity in compensation. By taking these steps, it is hoped that pay inequalities will be eliminated and a more inclusive and equitable work environment created.
