Nick Page, CIPD adviser, pay and employment conditions, considers whether audits are the answer to equal value problems.

The issue of equal pay is moving up the policy agenda, prompted by recent research indicating that women in full-time work still earn only 80 per cent of the average hourly wage of men in full-time work (for part-timers the figures are even worse).  The issue is also being highlighted through campaigns launched by the TUC (Fair Pay for Women Now) and the Equal Opportunities Commission (Valuing Women) to coincide with the 30th Anniversary of the Equal Pay Act 1970.

These campaigns have the support of the government, which has already announced measures to speed up tribunal claims for equal pay.  The government is also expected to pay particular attention to the findings of the Equal Pay Task Force, a body headed by Bob Mason, BT Wireless’s senior vice-president of HR.  During the past year, the task force has been collecting evidence from a number of sources, including the CIPD.  It is expected to make a number of recommendations for action, most notably for compulsory pay audits – a proposal that would require employers to examine and reveal differences between the levels of pay for men and women in their organisation.

The slow progress in closing the pay gap has led to considerable and understandable frustration, but would compulsory audits help?  The CIPD thinks they are probably not the answer:  a compulsory approach would be likely to cause resentment among employers and would not end most unequal pay practices.

Pay gaps between men and women usually arise from a range of complex reasons rather than direct and blatant discrimination.  In a climate of compulsory auditing, some employers could be labelled as treating and paying women unfairly.  Yet the real reasons for the pay gap may lie not with the employer but with a range of factors – from indirect  discrimination through to wider family and cultural influences.  There are also issues about who would be responsible for organising, resourcing and enforcing compulsory pay auditing.  In short, a government-imposed pay audit would probably not be effective in identifying causes of unequal pay, would be hard to police and could damage employee relations.

Voluntary pay auditing, on the other hand, could play a constructive role in helping organisations that had an equal pay problem and would commit to taking appropriate action.  Voluntary pay audits have proved to be a valuable tool, because the employers using them have been willing to reconsider how employees’ pay is determined and what wider assistance, such as help with childcare, might be necessary.

Such investigations would also be likely to be far more in-depth than compulsory audits, which would have to be based on a minimum requirement so as not to place burdensome costs on employers.

Perhaps the key to making significant progress on equal pay is raising awareness of the issue and convincing employers that the problem is widespread and may exist in their organisation.  If a company bases its work organisation, career development and remuneration decisions on misconceptions, biased value systems, stereotypes and prejudice, it is not making rational decisions.  That can only undermine its ability to realise the full potential of all employees.

The CIPD is putting together guidance for members on why and how to conduct voluntary pay audits as part of a briefing document on best practice in equal pay.