Gender pay gap reporting – the time has come

Chloé Chambraud, Business in the Community Gender Research and Policy Manager, calls for action on gender pay gap reporting as the new legislation becomes mandatory on April 6, 2017. 

 

On 6th April 2017, gender pay gap reporting legislation will come into force. Employers from the private and voluntary sector with over 250 employees will now begin to gather data – if they haven’t started to do so already – and will have to publish the findings by the 4th of April 2018. We are proud to say that some of our members have already published their gender pay gap data and set a good example for others to follow.

Business in the Community is committed to supporting employers in the reporting process, and we have published four toolkits to help them understand, communicate and tackle their gender pay gaps. However, we are also challenging and encouraging all employers to go further than the existing regulations by publishing additional pay gaps and a narrative explaining the story behind the figures.

Not one gap, but several
Calculating gender pay gaps by ethnicity, age and disability will give employers some insight into the challenges that certain groups of women face. Business in the Community gender equality campaign member Sodexo has already committed to this, and we hope to see other organisations do the same. We know that the gender pay gap is largest amongst those over 50 and among most minority ethnic women. Taking an intersectional approach and identifying which groups of women are most disadvantaged will help inform your strategy and put in place targeted interventions that benefit all women, not just a few.

Our research into employees’ views on reporting found that 9 in 10 employees also want to see the gender pay gap by grade or job level. Calculating this figure would give a new degree of granularity to the data and can help you tackle any unexplained disparity in remuneration. The Greater London Authority (GLA), a leading employer on gender pay gap reporting, have published the median and mean pay gaps for each of their grades in order to expose where inequalities lie. The pay gap by grade or job level is likely to be much smaller than the overall pay gap. In 2015, Deloitte, our Transparency Award Winner 2016 published an overall gender pay gap of 17.8%. However, they pay by grade was much smaller, narrowing to 1.5%.

What a good story looks like
A strong narrative is a transparent one. What you’re doing about your pay gap matters more than the size of the gap in itself. When explaining your figures, we suggest you include the following elements:

  • an explanation of the difference between gender pay gap and equal pay;
  • the factors driving the pay gap in your sector and company;
  • relevant contextual workforce data (such as the proportion of women and men in senior roles);
  • an action plan with public targets.

Our report ‘The Gender Pay Gap: What Employees Really Think’ showed that 67% of employees would ask their employer want they are doing to close the pay gap, and 89% of employees would feel more positively towards their employer if they published an action plan alongside their figures.

Greater transparency means greater accountability. By calculating several pay gaps, employers will be able to identify where inequalities lie and where action is indeed.

The gender pay reporting regulations will ensure employers become publicly accountable for collectively closing the gender gap, and will hopefully reduce bias and increase transparency in decision-making on recruitment, performance appraisals and promotion decision. Now is the time for employers to act – to identify where their gaps are and focus on changing organisational culture and break down the structural barriers to true gender equality. We will support them on this journey.