Analysis: How Tesco plans to close its gender pay gap

The median pay gap between men and women at Tesco is 8.7%, which is significantly below the national average of 18.4%, yet the grocer insisted “there is so much more we want to do”.

Retail Week takes a closer look at how Britain’s biggest retailer is aiming to close the gap even further and set the bar for others in the sector.

Attracting and empowering female talent

The source of much of the discrepancy in gender pay is the lower proportion of women than men in senior roles.

Both Tesco and its grocery rival Aldi have cited this as a driving factor behind their respective pay gaps, while Phase Eight claims its median pay gap of 54.5% is “misleading” because its store staff are overwhelmingly female, unlike its corporate head office.

Phase Eight argues “women and men are paid equally for doing the equivalent jobs”.

Putting aside the nuances of the equal pay versus gender pay argument, the quickest way to close the gender pay gap is for retailers to increase the number of women employed at higher levels.

“Tesco has also signed up to the 30% Club, which encourages businesses to achieve a minimum of 30% female representation in senior roles”

Tesco is making efforts to do so by increasing the number of women that occupy the 50 most senior positions at the company.

The supermarket giant will provide an update on progress in its 2018 annual report. It has already made moves in the right direction with the appointments of group communications director Jane Lawrie and chief customer officer Alessandra Bellini to its executive committee.

As a further sign of its commitment, Tesco has also signed up to the 30% Club, which encourages businesses to achieve a minimum of 30% female representation in senior roles.

Tesco also wants to create more opportunities for women to be promoted from within. Everywoman, the world’s largest network for females in business, is helping the grocer develop its Women in Business network, a learning and development platform that offers advice and networking opportunities for women.

Tesco says it now also provides “enhanced access to coaching support” for female employees who are seen as high potential business leaders of the future.

Flexible working

Another major factor Tesco highlights in its gender pay gap is the career and lifestyle choices of staff. It found men are more likely to work nights, bank holidays and Sundays, which means they are paid more as a result of overtime or premium payments.

One commonly cited explanation for this is that the onus for childcare still falls largely on women. The Scandinavian model of offering equal maternity and paternity benefits is one workaround for this issue.

However, in the UK, statutory parental benefits are still geared towards women being the primary child carer.

Businesses including Tesco are stepping up when it comes to creating a more balanced approach. The retailer has extended payments to colleagues on maternity leave and introduced shared parental leave, which means workers can be flexible about the way they care for their child.

“Tesco is experimenting with the implementation of technology to aid in the re-imagination of traditional working practices”

Tesco has also enlisted part-time jobs specialist Timewise to explore options including greater flexible working opportunities in managerial roles to “unblock career progression for part-time workers”.

A flexible working review is also underway at Tesco to ensure options including term-time only contracts, along with seasonal and ‘friends and family’ job shares, are made available to its workforce.

At the same time, Tesco is experimenting with the implementation of technology to aid in the re-imagination of traditional working practices.

Tesco has developed an app to give colleagues more control of their own work schedules as well as providing further opportunities to work additional hours.

A pilot for the app is currently live in one store in the UK and used by 160 colleagues. The grocer expects to roll it out across the UK later in the year.

Level playing field from the start

It is not enough to parachute women in at the top, as efforts must also be made to ensure there is a level playing field throughout their careers, including at the very start.

Tesco is continuing to develop and expand its apprenticeship programme, with schemes designed to build colleagues’ skills for the future, regardless of their gender, background or education.

Retailers can also look to Aldi for examples of giving women equal opportunities from day one. Aldi reported it has a gender pay gap of only 4.8% and says this is because the only factors it takes into account when determining pay are the “role you undertake for the business and your length of service”.

“Tesco has implemented inclusion training for its 50 most senior UK staff, which is designed to cascade down through the business to ensure the business attracts and retains a diverse workforce”

Every graduate area manager that joins Aldi starts on £44,000, irrespective of any other factors. Their rate of pay is then increased annually based on their length of service. Aldi also does not pay bonuses based on individual performance to male or female colleagues.

The concept of a level playing field at Tesco also extends to ensuring there is diversity across the workforce beyond gender.

Tesco has implemented inclusion training for its 50 most senior UK staff, which is designed to cascade down through the business to ensure the business attracts and retains a diverse workforce.

Training is designed to help senior staff recognise their own bias and then manage and challenge how these might impact people in the workplace.