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H E A L T H W E A L T H C A R E E R
M E R C E R W E B C A S T
W H E N E M P L O Y E E S T H R I V ES o l v i n g y o u r G e n d e r P a y G a pa n d D e l i v e r i n g t h e B u s i n e s sB e n e f i t s o f D i v e r s i t y
18 August 2015
Chris [email protected]
Julia [email protected]
Deirdre [email protected]
© MERCER 2015 1
T O D AY ’ S S P E A K E R S
Chris CharmanReward
Julia HowesWorkforce Analytics
Deirdre GoldenDiversity & Inclusion
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Prime Minister David Cameron, 14 July 2015.
“We will make every singlecompany with 250
employees or more publishthe gap between average
female and male earnings”
“This will create the pressurewe need for change, drivingwomen’s wages up,”
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W H Y ?
3
A recent study by statistics agency Eurostat found that the UK has the sixth-largest pay gap between men and women in the European Union.
Professional women aged 40-plus are hit hardest, encountering a ‘mid-life paycrisis’ as they earn 35 per cent less than men in comparable, full-time roles.
2.2 million women who are not working want to work. Equalisingparticipation rates could add 10% to the size of the UK economy by 2030.
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E U R O P E A N E X A M P L E S
More and more countries are inferring national legislative requirements with regards to equalpay between men and women.
Finland:As of the 1st ofJanuary 2015Finnishcompanies withan average of30 employeesor more mustperform agender paysurvey everythird year
Sweden:Swedishcompanies withan average of25 employeesor more mustperform agender paysurvey everythird year
Belgium:Since 2012,firms with over50 employeesare to establisha comparativeanalysis of thewage structureof female andmale employees
Spain:Companies withover 250employees areobliged toformulate andimplementgender equalityplans
Austria:Compulsoryrequirement forcompanies topublish equalpay reportsevery two years
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M U L T I P L E L E N S E S A R E R E Q U I R E D
5
S a m e W o r k
E q u i v a l e n tW o r k
O c c u p a t i o n a lS e g r e g a t i o n
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P AY B Y G R A D E
A B C D
AN
NU
AL
ME
DIA
NP
AY
G R A D E
PAY B Y G R AD E : M A LE V S . F E M AL E
Male
Female
Disguised Case Study
© MERCER 2015 7
FIN
AN
CE
OP
ER
ATI
ON
S
CO
MM
ER
CIA
L
HR
HE
ALT
HA
ND
SA
FETY
PR
OJE
CT
MA
NA
GE
ME
NT
SU
PP
LYC
HA
IN
IT
EN
GIN
EE
RIN
G
STR
ATE
GY
-20% -8% -35% 2%
I -27% -20% -19% -8% 1% -28% -11%
H -7% -9% -20% -9% -25% -7% -8%
G -7% -7% -17% -3% -6% -20% -6%
F -2% 2% -22% -3% -2% -1% -33% -22% -6%
E -1% 4% -25% -6% -17% -17% -13%
D -22% -24% -20% -21% -12% -11% -15%
C -18% -13% -8% -35% -9% -18% -1%
B -6% -16%
A -12% -18%
P AY B Y G R A D E A N D J O B F A M I LY
Disguised Case Study
© MERCER 2015 8
Percentage difference in FTE base pay
U N D E R S T A N D T H E L E G I T I M A T E D R I V E R S O F P AYD I F F E R E N C E S
Disguised Case Study
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U N D E R S T A N D I N G C A U S E S A N D P R O G R A M M EE F F E C T I V E N E S S
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
BELOWEXPECTATIONS
MEETSEXPECTATIONS
EXCEEDSEXPECTATIONS
EXCEPTIONAL
AV
ER
GE
PA
YIN
CR
EA
SE
(IN
CL
UD
ING
ZE
RO
)
P E R F O R M AN C E R AT I N G
P E R F OR M A NC E V S . PAY I N C R E AS E S
MaleFemaleTotal
Disguised Case Study
© MERCER 2015 10
P R I O R I T Y A R E A S T O P AY A T T E N T I O N T O
DISCRETION
WORKINGHOURS
• Compare full-timeand part-timeworkers
PAY ONPROMOTION
STARTINGSALARIES
PAY FORPERFORMANCE
• Pay increases andbonus awards
• Rating : Awardsfor the sameperformance level
• LTI – eligibility andlevel of awards
AD HOC
• Formal allowance
• In-year paydecisions
A Case in Point:
Ofgel (The Official Graduate Employers List)research published on 14 July 2015• Feedback from 140,000 graduates• Whether by course, region, industry or job
title: men get paid more than women sixmonths after finishing their degree.
© MERCER 2015 11
B U T H E R E I S T H E I S S U E
11
I T I S N ’ T E N O U G H
• Female representation is always anissue, and more of a contributor factorin most cases than pure pay systems
• What is this really about?– Business solutions
• What is the real opportunity?– Business performance
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T H E E V I D E N C E F O R T H E P O S I T I V E F I N A N C I A LI M P A C T O F D I V E R S I T Y I S C O M P E L L I N G
Higherreturn on
sales
Higherreturn on
invested capital
Higherreturn onequity
C O M PAN I E S W I TH BE T TE R GE N D E R D I V E R S I TYO N T H E IR B O AR D S O R TO P M A N AG E M E N T T E AM S H AD …
S o u r c e : M c K i n s e y & C o m p a n y , 2 0 1 4
42% 66% 53%
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Talent Reward
Culture
A Diverse& InclusiveWorkforce
Talent
• Attraction• Development• Promotion• Retention
Reward
• Compensation• Performance rewards
Culture
• Leadership behaviour• Employee engagement• Culture of inclusion
D I V E R S I T Y S H O U L D B E M A N A G E DH O L I S T I C A L L Y
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W O R K F O R C E M A P S H O W I N G G E N D E R F L O W S
Do we buy or buildfemale talent?
Do we havesufficientmovement offemales?
Where are ourcareer bottlenecksfor females?
Are there focalpoints of entry andexit for females?
© MERCER 2015 15
Hired:Turnover:
women are advantaged
women are disadvantaged
women are neither advantagednor disadvantaged
Job A79 / 32
SeniorManager143 / 57
VP54 / 12
5/14
32/13
16/1Job B73 / 74
Job C72 / 30
13/511/11
1/42/0
8/710/84/8
12/55/11
All numbers: Male versus Females
14/135/10
H O W D O C A R E E R S U N F O L D ?
Disguised Case Study
© MERCER 2015 16
A C H I E V I N G A C U L T U R E O F D I V E R S I T Y &I N C L U S I O N
Workforce diversity can only be sustained if it is supported by an inclusive culture (asdefined by values, norms, behaviours, leadership, and organisational practices).
W o r k f o r c eM o v e m e n t s C u l t u r a l D y n a m i c s
Whatemployees
andmanagers
do
Whatemployees
andmanagers
say
© MERCER 2015 17
F O R M A LValuesNorms
Expected behavioursLeadership
Organisational practicesHR & business policiesSystems and processes
I N C L U S I V E C U L T U R ELiving the values
Welcomes diversityInclusive leaders
Enabling environmentSupports employees through life stages
I N F O R M A LAttitudes
BehavioursHow things are done around
here!
C U LT U R AL D Y N AM I C S
Organisational Culture is defined as the way in which members of an organisation relate to each other,their work and the outside world in comparison to other organisations. Geert Hofstead
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D I V E R S I T Y & I N C L U S I O N M A T U R I T YM O D E L
Foundational
In compliance:
• Meet legislativeand regulatoryrequirements atlocal level
• Providing equalityof opportunity
• Policy focus
Advancing
Valuing diversity:• Identify the
business case fordiversity
• Raising awarenessof diversity
• Communicatingbusiness benefit
• Building grass-roots engagement
• Build a diversepipeline
Intermediate
Integratinginclusion:
• Focus on creatingan inclusive culturethrough:o Leadershipo Accountabilityo Measurement
• Values driven• Establish D&I
governance
Mature
Leading from thefront:
• D&I core businesscompetence
• Embedding D&Iinto integrated HRand businesssystems andprocesses
• Culturalintelligence
World Class
Innovating:• D&I Infrastructure
that supportsglobal and localinitiatives
• Recognised as aworld class leaderin D&I
• External brand andinternal brandaligned
• D&I drivesinnovation
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W E O F F E R T H R E E L E V E L S O F A S S E S S M E N T –I N T E G R A T I N G R E W A R D , T A L E N T A N D C U L T U R E
19
General Advanced Strategic
S n a p s h o t o fc u r r e n t s t a t e
U n d e r s t a n d i n go f i s s u e s a n d
d r i v e r s
D e v e l o p m e n to f s t r a t e g y
• Pay gap analysis• High level Workforce
Maps• Review of what done D&I
to date - baseline• Review of existing data
and insight
• Job evaluation and equalvalue testing
• Dynamic analysis ofsystemic reward risks
• Post maternity analysis• Extensive Workforce
Maps• Cultural assessment
through leadership andmanager interviews
• Employee focus groups
• Causal driver analysis forpay and promotion
• Diversity and inclusionmaturity model anddiagnostic tool deployed
• Development ofintegrated Diversity andInclusion strategy
Proposition builds cumulatively
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W H E N W O M E N T H R I V E R E M I N D E R
http://www.imercer.com/products/whenwomenthrive.aspx
Last year Mercer launched the inauguralWhen Women Thrive, Businesses Thrivereport based on benchmarking data fromMercer’s gender diversity research with 164organisations in 28 countries. Do womenthrive in your organisation?
We invite your organisation to participate inthe 2015 benchmark report and attend ourGender Diversity Conference in Brussels on 9and 10 November 2015.
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