Workplace issues such as discrimination and harassment have been dominating headlines in recent months, including in the insurance industry, which is in the midst of its own drive to stamp out bad behaviour.
Amid the conversation, the significance of the gender pay gap has been difficult to dismiss. In many industries there are still far fewer women in senior leadership positions than men, and insurance is no exception.
For some, that’s a reflection of wider societal trends and the barriers facing women when it comes to reaching the top of the ladder – factors that will take time to shift. But for businesses today, having a sizeable gender pay gap presents tangible risks, and requires far more urgent attention, according to Marsh.
The gender pay reporting regulation has seen UK employers with more than 250 staff required by law to report figures detailing the difference between mean and median pay for men and women in April this year.
That data, thought to be the most comprehensive collected by any country, has revealed some pretty stark results: almost eight in 10 companies and public-sector bodies pay men more than women, with the construction sector and financial services reporting the largest difference.
This week, the Chartered Insurance Institute (CII) released a report which analysed 192 insurers, intermediaries, financial advisors, service providers and loss adjusters in the country, finding a gap of 24% as measured by median hourly difference.
“Without under-playing the urgency of addressing this disparity, the pay gap itself cannot be fixed over-night,” said Tali Shlomo, the CII’s people engagement director. “We must develop good practice in the tools and methods that are effective in addressing the root causes of the gap, and we can start that now.”
But while it will take time to truly address the factors underlying the gender pay gap, companies are facing risks today, says Eleni Petros, employment practices liability insurance practice leader, at Marsh.
Alongside a potential breach of equal pay laws, organisations face risks around both reputational and employer liability.
“It will raise scrutiny. If companies have a massive gender pay gap, I think there will be questions raised by employees as to whether they are being paid the same amount of money as the person next to them,” Petros told Insurance Business.
“I don’t think companies and boards can afford to leave it as just an HR issue anymore. I think it very much needs to be at the centre of the board’s agenda.”
According to Petros, we could see a rise in claims against employers who publish data revealing a poor gender pay gap.
“Companies need to be preparing now for what the reporting reveals about them,” she said in a Marsh blog. “You should not only carefully review what the results of the reporting figures illustrate about your organisation, but also consider additional diversity initiatives and inclusion policies. Now is also the time to plan communications with staff and customers in order to deliver the right message that reflects the true position of the organisation.”
Petros added: “Significant gender pay gaps could severely damage your employer brand and company reputation, potentially leading to disgruntled shareholders claiming that senior management failed to properly manage reputational risk.”