April was a historic month for British business – the full effects of which have not yet been felt.
The introduction of gender pay gap reporting brought the conversation around gender imbalance in the workplace to the fore. The brightest of lights was shone on companies hiding a pervasive problem in the way in which pay is distributed between genders.
Gender pay gap reporting may be a blunt statistical instrument that belies a complex and nuanced issue, but its greatest value is the conversation it stimulates. Public disclosure forces those reporting to not only reflect on their past failings, but provide clear guidance on how the challenge will be tackled in the longer term.
While not the worst sector in the UK, the real estate industry has a way to go, ranking 17th out of 23 sectors on its mean pay gap with an average ratio of 16.7%. The issue of gender imbalance is not a new one for real estate. The industry has been working hard to shed its ‘old boys’ club’ image with mixed success. But despite setbacks, the trend line has been undoubtedly positive. Since the financial crisis there has been a broad consensus that, beyond the moral compunction, the business case for a diverse workforce is compelling.
The recent Presidents Club exposé has shown the consequences for those that fail to keep up. The natural next step is for the institutional investment community to factor gender pay gap reporting into its decision-making.
With all the evidence showing the problem at hand and the understanding that resolving the problem is beneficial, if not essential, to future business success, comes the opportunity for real estate businesses to differentiate themselves from the competition.
One of the most underappreciated aspects of gender pay gap reporting is its regularity. A one-off snapshot adds little value if one can’t measure progress. The requirement for companies to report on an annual basis will, in the long term, allow all stakeholders to benchmark against previous years and a company’s peer group.
”It is the businesses that take the long-term view that improving their pay gap is a crucial differentiator to potential partners and future talent that will be successful”
Many companies will take the view that as long as they are in the middle of the pack, they are safe. But this attitude overlooks the huge opportunity to positively stand out. It is the businesses that take the long-term view that improving their pay gap is a crucial differentiator to potential partners and future talent that will be successful. This attitude is essential to recruiting and retaining the next generation of professionals. This is not just about attracting the best businesswomen to your company, but the many who want to work for socially progressive institutions.
I wrote last year in Property Week that to improve diversity we have to look at the grass roots. With a lack of women in senior positions being a key contributor to the gender pay gap, this has never been more important. Encouraging women to look at real estate as a viable, long-term career will have a significant effect. More immediately, there have to be better policies in place to encourage women to stay in the workforce at critical stages in their lives. This means looking at return-to-work schemes, flexible working, shared parental leave, mentoring and coaching and urging everyone in the business to welcome these initiatives.
Corporates and their leaders across the real estate sector have come out with bold promises that change is afoot, but actions always speak louder than words. Encouraging a competitive, free-market spirit between companies on their gender pay gaps will bring a capitalist efficiency to one of the great societal issues of the day.
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