European Reward Conference 2017- "Pay, populism and politics" (breakout session)
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Transcript of European Reward Conference 2017- "Pay, populism and politics" (breakout session)
9 February 2017
Pay, populism and politics
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Eva Patier, Tamsin Sridhara with
Lesley Ballantyne, John Lewis Partnership
Contents
2© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
European snapshots and company responses
Case study: John Lewis Partnership
Lesley Ballantyne – Director, People Strategy
Roundtable discussion
Practical insights and actions
European snapshot
3© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
The current social - political debate is over how much more should be done to encouarge greater pay
equity and progression
MINIMUM WAGE
BUT this is not the same as a living wage¹
GENDER PAY
GAP
BUT over past few years has remained around this level²
INCOME
INEQUALITY
BUT significantly higher differences between median and CEO income ³
STOX600 WOMEN
ON BOARDS
BUT only 3.5% have female CEOs⁴
¹Source: EUROSTAT minimum wage statistics July 2016
²Source: EUROSTAT gender pay gap statistics 2014
³Source: EUROSTAT income distribution stats Feb 2016
⁴Source: EWOB – Gender Diversity on European Boards
22 members 16.7% 5.2x 25%
European snapshot
4
What’s new and topical for 2017
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Minimum wage, Equal Pay,
Gender Pay Gap, Transparency
Living Wage, Gender Pay Gap,
Pay Ratios
Shareholder Rights Directive,
Transparency on pay differentials
Equal Pay
Management diversity
Living Wage, Gender Pay Gap,
High CEO pay, Board quota
Pay ratios, Equal Opportunities,
Pay caps (gov’t owned)
Minimum wage
Pay ratios
Minimum wage
Pay caps (gov’t owned)
Companies have a choice about how the respond
5© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
COMPANY RESPONSE
COMPLY
Focus on meeting regulatory
requirements when you have
to and minimising any risk to
the company
Proactively use external
pressure to address internal
reward/ talent weaknesses for
benefit of the business
Compliance-driven
approach
Company-driven
approach
CONNECT INTEGRATE COMMUNICATE
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We are seeing a range of responses
UNDERSTANDING BEING TRANSPARENT
INTEGRATING OWNING
Executive benchmarking
Peers
Employees
7© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
There are common practical implications
You need to access and analyse
the DATA: even where transparency
on pay gaps/ ratios is not required by
law, more companies are ensuring
they understand the gaps and ratios,
and the drivers to these
1
2
3
There are always WIDER
IMPLICATIONS: rises in minimum
wage levels impact total rewards
strategy and affordability; gender
pay gap and board diversity are
about talent management
4
It can strike are heart of your
EMPLOYEE PROPOSITION
especially in industry sectors where
lower paid workforce and/ or
concentration of women in lower
organisation levels
5
TRANSPARENCY means care on
communication: need to make sure
that manage the messages around
minimum wage, pay gaps, CEO pay
and that messages are joined up -
internally and externally
6
Prepare for the legal and
reputational RISKS: transparency
on equal pay and gender pay gaps
and CEO can fuel litigation,
employee comment and media
mischief
It tests your job ARCHITECTURE,
rewards and careers frameworks:
a robust approach to job architecture
and levelling, and to salary and
career management supports pay
equity and progression
8© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Underlying each area are the same core HR areas
REWARDS
strategy
TALENT
Strategy COMMUNCIATIONS
Strategy
Low pay Equal pay Gender pay Pay differentials
9© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Insights from John Lewis Partnership Lesley Ballantyne, John Lewis Partnership
10© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Roundtable questions
11© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Roundtable questions
1. What impact are calls for more equity in pay and
progression, and more transparency having on your/ the
company’s agenda? ?
2. What are you doing? Planning to do? ?
3. Do you have access to the data you need? What type of
analytics are you doing to understand the situation? ?
4. How transparent are you willing to be on employee pay
levels, gender pay gaps, CEO pay ratios etc??
12© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Practical insights and actions
13© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
In summary… on pay equity, progression and transparency
A robust job/ reward infrastructure is a key underpin in helping you
take a “fair” approach to pay management that fits with your agenda. It
also helps minimise the legal and reputational risks 1
2Good data and analytics provide you with facts not (mis)perceptions.
They allow you to view issues around pay equity from different
perspectives and to understand the key levers/ drivers so interventions
are properly targeted. They inform your communications
3Transparency requires carefully planned and coordinated
communications whether you want to be open or are having to be open.
Employees, stakeholders and the media will all react. You can inform and
influence that reaction
4A more integrated approach. Joining up the internal discussions and
integrating activities with your wider Rewards and Talent agenda can
increase the business benefits