The fight for equality now – not in 2047

The fight for equality in the UK approached a turning point on 4th April 2018 when companies were forced to reveal their gender pay gap. The results were as expected – almost eight in ten companies and public-sector bodies pay men more than women. But what did these results actually reveal? The figures and the quality of the data are far from perfect. For example, high-level executives including partners and non-employed, low-paid workers are not included. We cannot therefore confidently say that the results are representative of the reality of the gender pay gap within companies – or equality in general. It could be much wider or indeed narrower than we think.

We’re now three months on and despite the promise of change, official forecasts predict that the gender pay gap will persist until at least 2047. Which begs the questions – is it going to be worth the wait? And will it lead to fairer pay within companies?

The truth is that equality within business, particularly around pay, is so much more than the pure gender debate. We need to consider what it means in terms of ethnicity, age and ability as well. In October 2017, the Parker Review published its first report on ethnic diversity in the boardrooms of UK companies. The report revealed that only 8% of 1,050 director positions are directors of colour and more than half of FTSE 100 companies have no ethnic minorities on their board. It’s clear that the problem of equality is much more than the pay gap between genders.

That said, the gender pay gap reporting is starting to increase the visibility and importance of all equal pay legislation with employees and wider stakeholders. This greater attention is starting to shine the spotlight on pay inequity and raises significant financial and reputational risks for companies who are not in compliance with the regulations. Birmingham City Council is one of the more famous cases of the financial risk associated with equal pay. Losing its fight against thousands of women it underpaid for years cost the Council an estimated £1.1 billion. That’s not the sort of bill any company wants to foot.

So how do they go about putting in practical steps to start making progress towards greater equality now? Firstly, companies must take a good look at how they currently fair from an equality perspective. Having an understanding of the problem will make finding a solution much easier. From there, they can then develop a plan of action for the next three to five years because, let’s face it, it’s impossible to change everyone’s pay overnight.

Typically, these types of pay and diversity analyses are done in Excel. There are also some HR platforms that can do elements of this; they can help develop a hiring plan but won’t provide a long term overview and model different scenarios showing how the hiring plan will help address the balance of equality over time. For example, what if you find a group that’s sitting outside of the pay structure? You need to get them back in and track the progress on a rolling basis.

The only way to do this is by using a more modern, connected approach to planning. By using a joined up platform to capture, monitor and analyse how your company is performing against any equality goals you set, you can make changes much more quickly. You’ll also have real-time updates easily accessible. We’ve recently launched a new app, based on connected planning. It helps businesses analyse their current equal pay gaps based on previously defined pay components (salary, bonus etc.) and forecast what those pay gaps could look like in the future, if certain changes are implemented. The app will then create a report which shows how a business’ current pay gap differs from the forecast, demonstrating the impact of the changes you are introducing in real time.

Most companies do this type of analysis on an ad hoc basis, particularly those with large, complex workforces. That’s where more modern planning comes into its own. Local councils are a good candidate for example; they have complicated terms and conditions around hiring and contracts and within one pay grade could have multiple different roles, some of which might be unionised, or they’ve been transferred from a different organization.

Businesses need to start getting a handle on what equality within their organization looks like and plan to bring about change now. The momentum around equality is gaining and businesses that don’t show that they’re making steps in the right direction to address the balance could face massive financial and reputation risk. It’s impractical to suggest we can solve all pay gaps tomorrow, but surely we can do better than 2047?

For more information on Vuealta’s equal pay app, contact us.

Five big tests facing your supply chain this year

We are living in interesting times. Europe seems to have turned a corner on the prevailing malaise and financial shocks of recent years. The emergence of Emmanuel Macron in France, who is once again championing a liberal and globalising attitude in Europe and the stability of Angela Merkel, suggests that this trend will continue.

In the UK and the US, however,  economic uncertainty as a result of the political climate  continues. Sterling in the UK has taken a knock and is driving inflation; in turn putting the breaks on consumer growth and squeezing spending. However, it is also driving the FTSE to new highs and could prove lucrative for UK manufacturers.

China is moving down the path of development and is more inward-looking.  As the US takes a more domestic-focused position, politically, China may step in to the breach and look to drive a more global agenda in areas such as climate change.

This context is highlighting some key challenges for functions across all sectors but in particular it raises some interesting considerations for supply and operations planning. The five big challenges for 2018 are:

1. External shocks from across the globe

Modern supply chains are increasingly global and involve chains of supply spanning multiple and disparate countries, as well as complex suppliers. More involvement means that organizations are exposed to a wider range of risks and external factors than before.

Large scale disasters such as hurricanes, earthquakes or geo-political instability in key supply markets will require significant mitigation efforts.

2. A squeeze on efficiency

Organizations will continue to face pressure to find efficiencies in supply chain costs. The move to online channels and new approaches to supply, along with recent low fuel prices, have provided opportunities for some organizations to significantly reduce costs. Even so, supply chain managers will remain under continued pressure to find cost savings. Once the big ticket items are gone it will be down to continued incremental cost reductions.

3. Speed to market

Uncertainty and the increasing pace of change means that companies need to have a real-time view of demand and a good understanding of the future direction of demand for their market. They then need to react quickly to these changes and pivot to meet the changing circumstances. At the same time, they are under pressure to communicate and obtain consensus from senior management and the market on the direction of travel, and they have to consider and manage logistics and inventory constraints.

The work to bring the demand and supply problem closer means integrating inputs across functions and developing an integrated planning process which can model the impact of changes across the related areas.

4. The exponential pace of change

As companies diversify and globalise their manufacturing base there is an increasing complexity in optimising the production process. The answers may vary not just by location but by time too. It’s important to consider that new product introductions could also mean moving into new markets, necessitating a new mix of production allocation across sites.

5. Customer expectations

For retailers, technology-led companies like Amazon and Uber, have shown the possibilities of true on-demand, seamless services. An Uber is a click away and in most cases you can expect next day delivery as standard. Other companies are having to respond and we have seen a rapid shift to next day or same day service.

This shift in expectations means companies will need to consider their markets and may need a fundamental change in their operating models.

From a planning perspective this means that we can expect to see continued improvements and collaboration between functions, with more real-time connected plans. Companies with siloed processes are not able to adjust quickly enough to capture the market opportunities.

In summary, what we are seeing is that the supply and operations planning processes will continue to integrate more closely across the business and become more integral to the overall strategy and direction of organizations. Companies who wish to remain nimble and efficient will move to a more frequent planning cycle and have the ability to model and report on changing market conditions and other external factors. At the same time, other functions like marketing, sales and logistics will provide regular inputs to ensure greater alignment and get closer to the customer.

Increasing scrutinity and reporting will be required from senior leadership and analysts to ensure effective communication and expectations setting externally, while also providing inputs to the continually moving strategy.