For years, it was a topic that would surface in studies and headlines, but rarely beyond. Then several countries began to get serious, requiring companies to report differences in gender pay gaps or trying to close it themselves. A few big firms spent millions trying to make up the pay difference between men and women in the same job.
But critics say it just hasn’t been enough, and this week the issue boiled in the largest city in Scotland with a mass walkout. Over two days, more than 8,000 employees of Glasgow City Council staged a mass walkout to protest pay discrepancies. To some, it could well be a prime example of leaders responding but still missing the public pulse. “This is something that is potentially very big and expensive to get wrong,” says Ben Frost, who leads Korn Ferry’s global Rewards Products business.
There have been landmark strikes over equal pay in decades past, and disputes in other towns earlier this year, but pundits are calling the Glasgow action one of the UK’s most extensive to date. The matter seems to stem from a potentially botched effort at job classification conducted more than a decade ago. However, now the workers want the problem solved, and fast.
Experts say the matter should worry any executive who isn’t paying close attention to their employees and how the company pays people. Thomas McMullen, a senior client partner and the leader in Korn Ferry’s North America Total Rewards Expertise group, says there’s a “decent probability” this kind of action “meanders across Europe and makes it ways to North America.”
Indeed, Equal pay has become a hot-button issue across the world. Governments are establishing new mandates or banning salary questions during job interviews as ways to equalize pay between men and women doing the same job. At the same time, private organizations are looking at ways to both correct past discrepancies and set up fair compensation systems going forward. Yet even executives who are paying close attention to gender pay gaps can get tripped up by the complexity of the issue.
Frost, for example, stresses the fundamental principle that “pay should be equal for work of equal value.” But he says that whatever method you use to evaluate the size and scope of a job should be both “objective and unbiased.”
McMullen says that for its part, Glasgow City Council developed a tailored and unique job evaluation system that may have contributed to the dispute. The city says the system was fine, though critics say a more well-known system might have better. However, even seemingly “right” systems can create issues. “One way to get the job and pay analysis wrong is to say we pay the garbage man more than the dinner lady and then use that fact to justify why one job should be bigger than the other,” says Frost. For that reason, smart human resources executives start with the job evaluation and not with how much the workers currently get paid. In this case, which is hypothetical, the jobs should be the same size.
That doesn’t necessarily mean that the people in those respective jobs will end up with the same take-home pay. Frost says jobs evaluated to be the same size should always get the same base pay, but it may be necessary to pay an additional premium to lure in workers who are in short supply. But such complexities don’t obscure the importance of this week’s news, which may serve as a wake-up call for some public and corporate leaders. “This is not an isolated issue,” says McMullen. “Eyes are on this in the public and private sectors.”