Episode #5 - Zara from GapSquare

Transparency and trust: We know there's a gender pay gap but what are you going to do about it?

Who better for Nic to sit down with ahead of International Women’s Day 2020 than Zara Nanu from GapSquare who is revolutionising how companies are measuring and ending pay gaps.

With a shift currently happening in the workforce due to automation, Nic and Zara discuss how society should also be innovating the way people are paid using the technologies and data available to us. They touch on whether people should be paid for the value of their work, not the time.

They talk about the new generations who are calling for transparency in the workplace. This includes their experiences with their own children, and the role parents play in bringing up a generation where inequality doesn’t exist and there are no preconceptions of which occupation fits a certain gender.

Zara talks about the shocking stories she has heard over her years working for GapSquare and the myth of the confidence gap. She also discusses the role Bristol has to play in the UK to lead the way in gender equality.

This fantastic Tough Cookies episode sheds a light on modern-day society: How far we have come but how far we have yet to go. … Join the conversation on Twitter.

Read the transcript

Hey, welcome to a new episode of the tough cookie series. Today I’m gonna be meeting with Zara Nanu. Zara is the CEO and founder of a Bristol startup called Gap Square. We’re gonna talk about how a Bristol startup is tackling the global problem of gender pay gap. Why gender pay gap exists and how we can solve it. I hope you enjoyed the show. See you soon. 

Hi Zara.

Hi.

How are you?

Yeah, good. Good.

For the approximately six listeners of this podcast, would you mind presenting yourself?

Yeah, so I’m Zara Nanu. I lead a company called Gap Square. The company is based in Bristol, and we’ve set up the company four years ago to specifically look at the gender pay gap. At that time, the World Economic Forum was saying that it will be 217 years before the gender pay gap globally is gonna be closed and the gender pay gap was at about 49% or something like that. And at the same time, the World Economic Forum was talking about how by 2030, most of us will be in self driving cars, waving people off to Mars or doing a lot of amazing things with technology. And yet, when we do that, we would still somehow be 200 years away from achieving pay parity. So at that point, we thought, is there a way in which we can leverage that technology and innovation to look at the gender pay gap and help businesses understand how they can use data to leverage a lot of information about their employees and their talent in order to build more inclusive, more diverse companies and make the most of diversity and inclusion in general?

So it’s a tech product? Is that correct?

Yes, it’s a tech product we’re developing software as a service cloud based that companies can use anywhere in the world. And we have customers from IDC to London MIT police, to Accenture who are using the product to look at their pay, reward and compensation in light of gender and other employee characteristics in order to understand where the gaps are, and most importantly, from our point of view is get insights about why those gaps are there. Because if you can’t understand why the gaps are there and where the root causes are, it’s really difficult to then identify where you put your resources, and how you make the most of an action plan to drive equality and diversity forward.

And how does the software helps finding those gaps, or is there some sort of consultancy on the back of it.

So currently, we help companies augment their payroll and HR data through into the software. And then they get instant insights about where the gaps are, depending on it like, results are only as good as the data that goes in. The more data company has, the more insights they’ll be able to get around gender equality and diversity or ethnicity as well as an employee’s age, department location, length of service and any other characteristics that can help build a picture. And then we use statistical regression models to help them identify how much of the difference can be explained by the sampling characteristics. How much can’t be explained, how much is down to geographic location because someone based in Bristol, at a law firm would earn a different wage than someone who works in London at the same at the same firm. And although the gap is there, it can be explained by the fact that one chose to live in Bristol and the other chose to live in London.

And how much of this desire from the company perspective? How much of that desire to learn about the gender pay gap is driven by the people at the top or given or driven by regulation only exists.

So right now we’re seeing kind of three trends in terms of where the drivers are coming from. One is we have a lot of millennials and generation X and Z and all the latter letters of the alphabet coming into the workforce. And they’re a generation that’s really interested in transparency. And they’re very much interested in fairness, they want to know that they’re being paid fairly compared to a colleague. They also want to make sure that their female colleague earns the same as other peers in the company. And if that’s not the case, Glassdoor research indicates that they will leave a job. So they want, it’s the generation, it’s a new workforce that really wants to make sure that everything’s done right. Then the second factor, the second driver is regulation. In the UK companies with 250 people or more currently have to report in their gender pay gap on an annual basis. And the data goes into a government equities portal and becomes publicly available. So anyone who’s looking for a job or who works for a specific company, let’s take like a local. Like Osborne Clark is one of our customers. If an employee you could just go on into the government equality website and see what the pay gap is. So regulation is driving that in the UK and the UK is a leading force in regulating the space. But at the same time, we currently have countries like France, Germany, Switzerland, Canada, the US even catching pace with this and bringing in legislative requirements in their respective countries. In addition to the regulation, then there’s a need for companies to, we see a need within companies to understand what their payroll is telling them in general, a lot of companies have grown through acquisitions, through kind of historical changes that have led them to what a current workforce looks like. Many times they use different payroll systems, different HR systems across their organization, which means the data is not really cohesive, and it’s really difficult to analyze and compare people. So there’s a real need to, for companies to actually try to get to grips with this data. And some research from Gartner, from a couple of years ago was showing that companies want to tackle this agenda, but about three fourths have no idea how and don’t know if they’re doing it right.

Okay, so do you see yourself at some point or do you think it’s– a dream to have like almost an open glass door for gender pay gap?

I definitely think we’re moving into that space. Definitely the use of glass door is increasing by the minute. And a lot of the jobs are now kind of available on there with people putting their wages on. So companies are catching up with the agenda. I think we are moving into that space. Interestingly enough, we are also moving away from pay per hour and pay for a specific job, that’s a nine to five job into pay per value. So it’s looking at how much value a person could bring to the organization or a role could bring to the organization and structuring remuneration and compensation in that way. So there’s definitely a shift from more historical traditional ways to compensate and remunerate people and rightly so we are the 21st century. We’re about to send people on to Mars, we should really rethink how we do pay and compensation and remuneration automation is putting also a lot of pressure on this, because so many jobs are gonna be gone. And then how do we value the time of the people who are still gonna be employed? And what other jobs can we create for the people who are gonna lose their jobs to automation. So the pressures are there, and it’s actually a unique interesting time to innovate this space. And tech and data could be key to this as well as a downfalls for it. So it could go either way.

And so just before this before this recording, we were talking together and there’s one question that somehow during this discussion we have to ask and it kills me to ask this question is, why do we need obviously, gender pay equality but gender representation equality in companies? Like what should be the driving force for that?

Yeah, I actually have a very dear friend who’s a bit older and we went together to, I think it was an International Women’s Day event or some launch of a report around women in Bristol and she said I can’t, I can’t even stay here and listen to this event because I can’t believe that I fought for equal pay act 50 years ago and now we’re still here talking about this. So it feels like 50 years have gone by, and really very little or no progress has has been made. The interesting thing around this agenda is that you still have people saying, Oh, is this a myth? You still have people saying does this need positive discrimination? Will these leave out men? Is this gonna leave out other groups like why are we emphasizing this, it’s more or should be more focused on skill or focus on experience or focus on fit and cultural fit of someone within their organization? Why are we talking about gender? But there’s this really good behavioral economics Professor at Harvard, I responded who we’ve had the pleasure of working with over the past few years and she actually has a book called “Gender Equality By Design” and the entire theory is that nothing’s gonna shift. Unless we actually, specifically design and embed policies and practices within an organization to change behavior around this. We’ve certainly seen we work with larger organizations. And we see how this kind of is a myth, this shouldn’t be a priority exists. But we also see how the use of data is helping focus people’s minds on this issue as a management issue. So all of a sudden, it becomes, this is where the numbers are, this is where I want them to get to. And this is how I’m gonna get from point A to point B and that way it moves beyond the political and beyond the emotional that sometimes surrounds this agenda.

And so we obviously have the legacy of the problems, so currently… Pay gap between for the same job between a woman and a man, but that it’s kind of like I’m putting those aside for one second, not certainly undermining that this is very big problem. On the other side, tomorrow, I won’t go into a new job, do we? And is it actually true that some men will actually decide, and maybe other woman to decide to pay less? Because that person is a woman? And is this something that we’ve been able to identify and is it? How does it manifest? Because it’s something I can’t even picture. Now how would you decide? Whatever reason other than the face value of the work or the face value of the person, whether that’s gender, color anything else? I can’t imagine that it has any impact on the salary of a person. How those people think and why basically?

So I was actually talking to a journalist in London a couple of weeks ago, and she was telling me about a case where she found out she was being paid 10,000, a year less than her male colleague. She was no longer at that company so she could share the details. But she said the… when she challenged the employer she was given the reason that the man negotiated when being offered the job and she didn’t. And ultimately, this burden shouldn’t be on the employee. If you decide to pay a job a certain rate, then you should pay everyone the same rate. And if someone’s negotiated, then that should apply to everyone else who you’re bringing on at the same level to do the same, the same job. But it still happens. And even in Bristol, the number of networking events I’ve been to where conversations evolved around something like, Oh yeah, I’ve employed her but initially we were thinking of this job being a 50K a year job, but I knew her husband is earning a lot of money, so we thought we’d give her 40. And conversation like it’s been surprising for me too, because I grew up in a world. It was facilitated by my parents and by many educators where everything was possible and achievable. So it came down to me to make the most of my life and like make the most of my opportunities. And then the more I worked and the more I met people, I saw how actually, the world isn’t structured in a way where I can make the most of my opportunities because cases like this still happen.

And do we? So basically, it’s a much wider problem, than obviously the pay equality itself is… what you’re telling me is that, when I come as a straight white male, middle class, I can negotiate things I have that privilege that I can actually have multiple offers, or I don’t know, I can take a risk. But there are other lots of people that either don’t know that they can take that risk, would they have to? Would they actually come before them? And therefore they don’t do it and therefore they have to settle for whatever is given. And that’s how we perpetrate the circle.

Yeah, absolutely. There’s also an interesting research published in The Atlantic a couple of years ago. And it was done by Harvard and a few tech companies in Silicon Valley to look at the confidence gap for women because they started with the premise that women lacked confidence, to ask for more money, to ask for a promotion. So they were trying and testing that theory in a few tech companies in the Silicon Valley. And interestingly enough, the conclusion they came up with is that there isn’t a confidence gap. Women have the same level of confidence as men. It’s more the fact that women have started over time to hide their confidence because they sometimes get penalized for showing confidence. They can be thought of as rude or they you know, we have certain understandings of the stereotypes about what a woman should look like and what a man should look like and how they should behave. And women are more encouraged to be around the kind of emotional intelligence, kind of softer approach to everyone inclusivity and things like that. So, that is praised more in a woman whereas a man needs to be seen as more driven, knowing what he wants to achieve kind of not always consultative, very determined approach to leadership. So, it was interesting that it was showing that women had the confidence but they chose to hide it because they were worried they would get penalized and overall not have a good working experience within the organization.

So we are both parents and one thing that recently happened with Alice our middle daughter, our second and she is five and I’m pretty sure she was really five at the time where she was going to be five. Anyway, so Alice grew up in… a house where both Nut and I runs a business so she knows that, I mean, when we talk about what do you wanna do when your older, I think there’s this idea in a family that floats around that we are all gonna manage a restaurant. So she knows she can run a business basically, because she’s seen it. But one thing that happened recently is this. I can’t remember how the conversation went on, but she said she cannot be a doctor. And we started the question like who said that? Was it school? Was it like somebody else that told you can’t doctor. And it just didn’t have to be much simpler than that. It was just that the few times she went to the GP, the GP was a man. And therefore, she assumed that in order to be a doctor, you have to be a man. And if you wanted to do something medical, you had to be a nurse and not a doctor, if you were a woman. So that idea of that tech was to me into two questions, the idea of representation, whether that’s in workplace or business or sea level, kind of in the businesses, and then also how we as parents can actually, ’cause our generation, like for us, it’s not always done, but everything is written ready. We’re trying to change it. We’re trying to be reactive to change, but with the kids, how can we instill this idea of equality between them regardless of sex and gender, and color of skin, all these kind of things?

Yeah, I’ve kind of three, three enough thoughts in result of this. One is that, I have my oldest one is 12. And she continuously tells me that we live in a world where everyone’s equal and boys or girls, it doesn’t matter, you still have, you have the same opportunity, you can achieve anything you want. And I’m encouraged by that. If they all think like that, then there’s hope that they can actually drive change and live in a world of change. But interestingly enough, I did a talk at their school a few years ago to talk about the gender pay gap. So I went into the school and we were talking about the differences in pay between men and women and how they’re paid differently. And this little boy looked up at me and said, “Well, that’s because mommies “and daddies do different kinds of jobs.” And I said, well, in what kind of way can you tell me in what kind of way? And he was saying, “Well, construction jobs are only “for daddy’s like construction jobs only for men. “And women don’t do construction jobs.” And I said, why do you think that is? And he was the sweetest boy. He said, “Well, we wouldn’t want a woman to walk “on a construction site because a brick could fall “on her head and hurt her,” which is very sweet for like a seven year old. But the preconceptions are already there in terms of occupational segregation and what kind of jobs one can do and another can’t and it’s important that we create that representation in those jobs so that they can start seeing each other. And it’s equally important that we not only create that representation, but actually highlight it and showcase it and talk about it, especially when it breaks barriers about being into specific job types and occupations, because ultimately, what you can’t see you can’t be, especially at that age.

So my thought about that is actually kids, the idea about teaching to the kids that we are equal. Actually, should we go a little bit further than that? And actually say no, look, there are problems and technically today we are not equal. And you have to be mindful because you’re gonna hear about those preconceptions. I had the luxury recently about talking to Timmy and Alice, Timmy is slightly older, he’s eight. I come to him again, I think we’re listening to the radio, and we had to talk about racism. And it’s, for him something that he’s never experienced, something that he’s never seen whether any of his friends, whether they are lying there’s no, for him everybody’s equal. And actually, we had to talk to him about what is racism and also highlight the fact that at least that’s what I was trying to do. I like the fact that we should be equal, but technically we’re not. And sometime we have to be slightly more mindful about what’s happening over there. Because somebody could be a position where they are hurt. And then we have to actually step up and say there is no equality. But how do we? Like is there any way to influence that?

Well, this is where we’ve seen the challenge over the past four years. We talked to companies and they’re saying oh, this issue is too big, this is too big for us to address. If you’re looking at a company based in Bristol with like 1000 employees or a company based in London with 40,000 employees, both of them think that this is too big for them. There’s lack of pipeline for women in science, technology and engineering to start thinking about more, creating more equal representation within the workplace. The issue is too big because we need government to be involved. We need policy, we need to change society stereotypes about who does what, we need to address discrimination by gender, by ethnicity, like the way the system is currently set up, does not work for facilitating inclusivity and diversity. But we do see how actually focusing attention on data and data driven insights can actually start paving a pathway towards achieving that success ’cause it moves, organizations and it moves people towards working together on achieving a goal. And that goal is very clear. Like it’s not, oh, let’s create more diversity, ’cause sometimes what does that mean? But if you’re looking at let’s increase the number of women in our leadership teams from 12% to 35 then that becomes more tangible, that becomes more doable, and everyone can rally together around that. And going back to transparency and trust that I mentioned at the beginning, all of the employees, the entire workforce of the UK understands that there is a gender pay gap. We’re now in year three of reporting into the government portal. And we know that most companies have a gap. The shock isn’t around the fact that there is a gap. Employees understand that it’s there. It’s more about what the company is doing about this gap, and how they’re taking their employees on that journey so that they can achieve everything together.

Okay, and is it? I mean, if we go back to data, is it a big company problem? Do small companies suffer the same gap? Or is there a tipping point in a small company that drives them onto actually, they have now creating this gap? Like how does he work? And when does the manifest.

This is really interesting ’cause we’ve just looked at the entire data set that companies… so 11,000 companies in the UK report on their gaps, and we also have office for National Statistics collecting data on this and also producing reports. And we found that the larger the company, the smaller the gap.

Okay

The smaller the company, the larger the gap. There’s some issues over there in terms of methodology and the way you look at it, ’cause the smaller company means smaller representations, so could be statistically insignificant, ’cause if you look at a department it could be made of three people. If depending on the agenda, the gap can be quite high or quite low. But yes, larger companies have smaller gender pay gaps. And we think a lot of it can be attributed to the fact that they have bigger budgets, more resource in HR to think about this. And actually more, they have the luxury of being able to think more strategically about this issue and think about it ahead of time. Whereas for smaller companies, the need to grow and to hire kind of overcomes that need to grow in a certain way. And when you have to employ 50 people a month, you’re pretty much going and taking anyone without much consideration for any of their characteristics.

And if we narrow it down to Bristol, now, how is Bristol doing?

So I think Bristol is doing better. So interestingly enough, by region, Bristol is doing better than say, the gaps that are in London or the gaps that are in other regions. And we found that a lot of it is attributed to the type of jobs in the region. So the higher the pay per region. So in London salaries are high. Salaries are really high, the gaps are really high. In Wales, the gaps are really small. But then the type of jobs that are available in Wales and the kind of the amounts that are being paid to people in Wales are significantly lower than London. So there’s, when we look at the UK and we see the regions, we can get really excited about Welsh, the Welsh having a very low gender pay gap, but ultimately, we’re talking about very low paid jobs. So it’s not yet cause to celebrate. We want to make sure that all the wealth is redistributed across the country and therefore available to everyone.

And the home of Gap Squares in Bristol. But the problem is global. Are you playing in a global market? Are you playing in a national market? Are you playing in a local market?

So our vision is that we want to develop a software that helps companies globally to create fair pay and to create fair workplaces for anyone regardless of their gender, ethnic background, religion, any kind of employee characteristic, and we started in Bristol, because of Bristol is a wonderful city from the point of view of bringing together business and purpose. And we have a lot of kind of inspiring businesses around the city that are ethically minded and kind of focused on being sustainable and the impact on environment in terms of human rights and any other issues. So, from that point of view, Bristol’s been the best place for Gap Squared start, and we love being here. And we’re looking at actually playing a role in the global agenda in about five years time when people think about fair pay. We want them to think Gap Squared.

They will hopefully. Now that’s usually the part where I try to go a bit more personal. So your relationship with Bristol, so you moved here 14 years ago?

Yeah.

I moved here 11 years ago. Now we’ve both seen the growth and spurts of like, Bristol has been changing basically over time. What’s your feel about Bristol today compared to what it was like 10, 15 years ago?

Well, so when I moved to Bristol, I moved to Bristol from California where I did my masters in Monterey and I moved here because I was looking to move to Europe. And someone said Bristol is just like San Francisco. So I moved to Bristol, unfriended the people who told me that Bristol was just like San Francisco. But–

There is a bridge.

Yeah, there’s a bridge and some hills and also the kind of the ethically minded communities and an overall kind of diverse community feel around it. And I think Bristol has real potential to set an example on the global arena of how you bring together, profit and business with creating change, sustainable change and making the world a better place that works for our children and actually delivers and is still there in 217 years.

What’s your favorite place in Bristol? Could be anything. A certain pub and park like your favorite place?

Wapping Wharf.

Yeah. Lot’s of choice of foods?

Yes.

And really nice I would say, yeah, really nice. And when you were nine years old. Did you always have that fight in you for any kind of like civic movements? So like, what did you want it to be when you were nine years old basically?

It was an interesting time when I was nine years old because I lived in what was the Soviet Union and he was just about to all fall apart. So we were experiencing shortages of food, of like uncertainty and jobs, uncertainty in what’s gonna happen tomorrow. So I think there was less focus on what I could achieve when I’m older and more focused on kind of survival and making sure we were still around. So that was a kind of a different time, but I think it has helped shape a lot of resilience in me and a lot of kind of determination and drive to make things better for everyone.

This is something that you trying to still push to your kids. Why? ‘Cause they have it easy-ish.

Yeah.

Let’s face it, I do something. I’m still trying to push the kids that resilience.

Yes, I think resilience is definitely important. And one thing that I’m really, I’ve really tried to create for my children is opportunity, as many as possible opportunities to fail. I think that is really important. And what I’ve learned over the past nearly 40 years of my life, is that failure is my best friend. I’ve never learned from anything else better than I’ve learned from failure. And ultimately I see a lot of parents trying to kind of create opportunities for success for their children to be successful. I think actually, I see a lot of value in creating opportunities for them to fail. And when they want to do something that I can say is gonna result in disaster, I am more likely to let them do it.

Let them do it and actually learn from it. That’s what I try. We also try recently to try to people and not teach them that. We force them to be bored for bets. I think we yeah, this dilemma ends now of like they’re always doing something, there’s always something to look at, something to hear and actually like. Just hearing I’m bored. Good Continue to be bored and something’s gonna come out of the bored.

Absolutely

Right. Thank you very much for your chat today. It was really lovely. I’ll let you go back to the office be with you in just a minute, we really enjoyed. I’ll talk to you very soon.

Thank you.

Thank you. Thanks.