One in five large employers has not conducted gender pay gap analysis in the past year, despite being legally required to.
Research among 832 business decision-makers, carried out by the CIPD and HR technology company ADP, found that 17% of organisations that employ 250 or more people – who are within the scope of the UK GPG reporting regulations – had not conducted any analysis in the 12 months to October 2023.
The organisations most likely to admit to not carrying out gender pay reporting in the 12 months to
October 2023 are those employing between 250 and 499 people (29%), the 2024 Pay performance and transparency report found.
Seventy-nine per cent of organisations employing fewer than 250 people had not conducted GPG analysis, but these organisations are not required by law to do so.
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The deadlines for the 2023-24 gender pay gap reporting round are 30 March for public sector employers and 4 April for private sector firms.
The report recommends that organisations increase pay transparency both internally and externally, including sharing more information with employees about where they sit on the pay scale and how pay varies by protected characteristics, such as ethnicity.
Overall, 44% of the organisations polled had carried out gender pay gap analysis in the past year, 32% had carried out an equal pay audit and 28% had produced an ethnicity pay report.
Charles Cotton, senior reward adviser at the CIPD, said: “What gets measured, gets managed, and with just over a month until the end of the gender pay gap reporting year, employers need to get ready to report. We encourage employers to not only calculate their gender pay gap data, but to really understand the reasons for it, and act on them wherever possible.
“Pay gap reporting is an important part of ensuring a fair workplace, as well as having clear business benefits, such as attracting and retaining talent by showing a commitment to good practice. It’s important that employers understand the barriers their people may face, not only relating to pay but also in terms of recruitment, promotion and development opportunities.
“Pay gap reporting, along with having an effective narrative and action plan, can identify and help tackle the causes of gender inequality.”
The CIPD/ADP report found that:
- Large organisations were more likely than smaller firms to have conducted equal pay audits (44% versus 14%), while public sector organisations were more likely to have analysed ethnicity pay gaps.
- The most common reason for not carrying out ethnicity pay gap analysis was company size (70% of small companies cited this). Respondents also said that they did not employ sufficient people of different ethnicities to carry out the analysis (25%).
- Over a quarter (27%) of large employers had conducted disability pay gap reporting, while 46% had not and 28% didn’t know. Only 9% of small companies had done so.
Other recommended actions include talking to employees about pensions, issuing total reward statements, publishing pay information in job adverts and considering ways of paying people that are more flexible to their needs instead of monthly pay runs.
Sirsha Haldar, general manager of the UK, Ireland & South Africa at ADP, said: “Employers must trust accurate indicators linked to their payroll systems to move beyond assumptions and analyse their real data, pinpointing any pay gaps.
“Without such tools and a committed budget for workplace equality, this injustice may endure, fostering diminishing employee morale and loyalty. Pay disparities can drive away valuable female talent and tarnish a company’s reputation, especially among younger generations increasingly concerned about equality in pay.
“We also want to put an emphasis on the delicate balance between transparency and confidentiality in salary information sharing. As organisations navigate the landscape of transparency in the modern work environment, the findings will empower decision-makers to strike the right equilibrium, fostering trust and collaboration within their teams.”
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