the gap

Are you ready to disclose your gender pay gap? Sustainability Adviser, Hannah Griffiths, reveals what you need to know.

From April 6th organisations will have 12 months to disclose a ‘snapshot’ of their gender pay gap data. However, the data itself is just part of the challenge.

To communicate a true and fair picture of their commitment and progress towards equal pay businesses will also need to tell the broader story of their actions and impact and to embed the systems and programmes needed. Compliance doesn’t have to be a daunting or thankless task. Forward thinking businesses will see it as an opportunity to enhance their ability to attract and retain talent, and ultimately their reputation and intangible value.

The aim of the legislation

The new regulation is part of The Equality Act and makes mandatory the annual publication of the gap in salaries and bonuses between male and female employees. The aim is to eliminate this gap and in doing so maximise talent and create a fairer, more inclusive workplace.

The aspiration is particularly pertinent right now. Changes in political rhetoric are causing many to fear for gender rights and social inequality is consistently showing up as a key global challenge. In fact, Reducing Inequalities was recently identified as one of the UN Sustainable Development Goals which was lagging behind the rest and vital for the achievement of the goals as a whole.

What’s required?

For employers of 250 and over in the UK, at this stage the requirement is annual public disclosure of six key figures relating to the snapshot date, both on the organisation’s corporate website and on a government site:

  • Average gender pay gap in hourly pay – mean and median
  • Average bonus gender pay gap – mean and median
  • Proportion of males and females receiving a bonus payment
  • Proportion of males and females in each quartile band of the organisation’s pay structure

These should be supported by a written statement signed by an appropriate Board or senior person confirming that the calculations are accurate.

The snapshot date is April 5th for businesses and charities, and March 31st for public sector organisations. The immediate priority then is to make sure that this data – and methodology – is accurately captured so that it can be clearly understood, compared and used to drive insight-led change.

Making your disclosure more meaningful

The gender pay gap is an understandably emotive subject and the data that companies are being asked to publish will be of significant interest to many stakeholders, particularly current and potential employees, the media and special interest groups. Amplifying a contextualised story will be critical to reflect more accurately commitment and progress towards equal pay.

To keep control of messaging, organisations should use their online disclosure and annual reporting to tell a complete story, supplementing data with information that first sets the context in which the business operates. Key questions to answer are: is the business in a male dominated sector? Or does it operate in geographies where cultural sensitivities make female inclusion more difficult? Organisations should then clarify the steps being taken to close the gap such as: research and engagement, partnerships, programmes and initiatives.

This, of course, highlights the real need - for initiatives and systems to drive change. A thoughtful and comprehensive engagement approach will be needed to explain to colleagues what the pay gap data means for the business and for individuals, and most importantly to demonstrate what is being done to tackle discrepancies. Forward thinking businesses will embrace this as an opportunity to build a more balanced workforce and to reap the rewards this will bring – increased employee morale, commitment and productivity; and enhanced talent attraction and retention, and business reputation.

Getting to the heart of the problem

This is not an easy task. The causes of the gap are multiple and tangled. Some are obvious and tangible, for example, the male-dominated nature of some sectors and maternity leave career gaps and childcare responsibilities. These in themselves are not easy to unpick, but others are nuanced and even harder to get a hold of – unintended everyday bias, the manifestation of female low self-esteem in the workplace, and the skewing of performance systems towards stereotypically male traits.

Getting to the heart of these causes will be central to closing the gap, as will tackling and communicating them in a respectful way. For example, is a binary interpretation of gender for the data still even appropriate?

Who’s already off the starting blocks?

A small number of businesses have taken the lead on reporting:

  • Mitie has published related data for over two years, disclosing the number of employees per pay band against age, gender and ethnicity categories; and also featuring a diversity KPI on the percentage of employees who feel they have equal rights.
  • PwC, the first to disclose pay gap, has gone a step further and begun to put pay gap data into context. The firm discloses an adjusted figure, by grade, to recalibrate for the male dominance in senior positions and is creating partnerships and programmes to tackle this imbalance and grow the number of senior women in the firm.

Many more are driving and supporting initiatives and targets that tackle the causes of the pay gap:

  • Lloyds Banking Group was the first to set a 40% senior women target back in 2014 and continues to report progress against this goal in its purpose-aligned Helping Britain Prosper Plan.
  • BAE has been a key driver for the promotion of STEM subjects to girls and for championing women in the industry, with initiatives that include engineering taster days and ‘Girls in Engineering’
  • Capita encourages shared parental leave for employees, along with a series of supporting options, including flexible working.
  • Procter & Gamble launched its #WeSeeEqual campaign to coincide with 2017 International Women’s Day in March. The campaign challenges gender stereotypes but also hints at a leadership position by the business on gender pay equality. The organisation already produces an annual stand-alone Diversity & Inclusion Report.

Want to know more?

If you would like to discuss this topic further or talk to us about how we can help you with you sustainability communications, please email [email protected].