Family friendly benefits under threat from new gender pay rules

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Despite new rules propelling the gender pay gap into the spotlight, Sodexo Engage’s Iain McMath believes employers must continue to fly the flag for family-friendly benefits to help working parents.

The countdown is on; by April, businesses with 250 or more employees will have to publish their gender pay gap in a move that’s likely to cause a headache for many. As part of the government’s push to reduce gender inequality in the workplace, organisations will have to report the difference between men and women’s salaries and bonuses, as well as the number of male and female employees.

This very public declaration, and all the scrutiny that will come with it, is placing companies under increasing pressure to bridge the gap. Worryingly, this could discourage companies from offering family-friendly benefits for fear they might skew the figures and make the pay gap look worse.

In the firing line

While any move to level the playing field between men and women should be celebrated, the gender pay gap report only paints half a picture. For a start, the figures do not reflect the total remuneration package of staff and so it’s difficult to know whether staff are fundamentally paid the same, but choose to take their pay in different ways e.g full salary or as a combination of salary and benefits.

The increasing demands of family life, coupled with the eye-watering cost of childcare, mean many parents struggle to strike a work/life balance. But in a blow to working parents, the report threatens to unfairly judge those companies looking to ease the burden through salary sacrifice schemes, including childcare vouchers, extra holidays and flexible working.

According to recent data*, 95% of employers offer childcare vouchers via salary sacrifice, making it one of the top three employee benefits. However, if more women opt for childcare vouchers or extra holiday than their male colleagues, it will make the pay gap appear greater. Companies who offer senior part-time roles to women will also be firmly in the firing line when the numbers are published.

What’s more, the data doesn’t reflect that part-time employees receive lower bonuses because of their decision to work reduced hours. Given that women tend to lead the march when it comes to part-time, with nearly 60% of mums with a child under the age of four opting for flexible working*, it could make for grim reading. It’s got to the point where companies are scrapping end of year bonuses for fear of women appearing to earn smaller amounts.

By the same token, if companies feel forced to rethink their approach to flexible hours, it will be working parents who are hit hardest. But the domino effect doesn’t end there; companies risk missing out on top talent as a result, and this could impact a business’ growth in the long term.

The power of benefits

The new rules place businesses in a difficult position - the expression “stuck between a rock and a hard place” springs to mind.

On the one hand, they don’t want their reputation to be tarnished by the assumption they don’t pay fairly, but they also want to be able to help parents strike a work/life balance. Ironically, company pay gaps are likely to suffer as a result of the very policies designed to boost the number of women in the workplace. 

But, without a doubt, having a satisfied workforce delivers great benefits to a business, both in the short and long term. Employees who feel cared for are far more likely to work harder and stay with the company for longer. Businesses need to remain focused on what’s really important - keeping their employees happy. And, if this means offering benefits that they value, they should continue do so.

Childcare vouchers currently help around 780,000 working parents save close to £933 in tax and national insurance on their childcare costs per year.

And, because more than one parent can sign up to the scheme, annual savings can actually reach as high as £1,866 per family. Equally, flexible working shows an employer’s understanding and appreciation of the realities of family life.

Building a company culture that values and respects each individual is vital. The key is to communicate what they offer both internally and externally, and clearly explain why there may be a gender pay difference.

Bring men on board

An important step forward for businesses to balance the equation is to make sure both men and women are interested in the benefits on offer. Men in senior positions should champion the advantages of family-friendly policies, not only by telling male employees they’re there for the taking, but by actively encouraging their use.

Companies should also be careful to ensure that their messaging around family-friendly benefits is as accessible and attractive to men as it is to women.

By offering benefits that truly deliver across the board for both male and female employees, businesses will be valued by their staff and become an attractive prospect for talent outside of their organisation, regardless of the gender pay gap. 

*According to the Employee Benefits/Staffcare Benefits research 2017, published in May 2017

*According to figures by the Office of National Statistics 

About Iain McMath

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