Gender pay gap reporting: How to get it right for 2019

The first round of gender pay gap reporting was big news in 2018, but how will employers adjust their approach for the second year of reporting? Ruth Thomas from Curo Compensation looks at the measures employers can take to reduce the gap.

Last year over 10,500 companies publicly reported their gender pay gap figures in line with the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. By the deadline of 4 April 2018 just over 94% of companies had reported with 100% compliance achieved by August this year.

Those figures showed that women’s mean hourly pay was 14.3% lower than men’s and that only 12% of reporting companies had a pay gap in favour of women. This means that as a woman in the UK today, you’re most likely working at a company which pays men more than women on an average basis. So what are businesses doing to address this?

Many have probably already calculated their figures for the second year as they have to use employee’s pay rates as at the snapshot date of the 5 April 2018 (31 March for the public sector).

The fact that fewer than 400 employers have actually publicly reported their data so far highlights that many are probably working out how present this year’s figures relative to last year and potentially explain why the numbers have not changed – or may have even got worse.

Those that have reported so far have not made it easy for stakeholders to understand changes year over year, with many resisting presenting the figures side by side.

What gets measured gets done

The reality is that the numbers are not going to be better this year as most of the issues driving pay gaps require a longer term view.

Each business’ circumstances will be different but demonstrating a clear understanding of what is causing pay gaps and committing to actions that, over time, will reduce those gaps is key.

Businesses need to address traditional male/female role divisions, the lack of female representation at senior levels and why women tend to work in lower paid roles.

Many are asking whether their recruitment processes are biased, or why women are not progressing at the same rate as men or are choosing to opt out and not return to the workforce.

Some are considering setting targets or using measures to track progress; such as the number of female applicants, hires and promotions or women in executive positions. Targets are great, as is the truism “what gets measured gets done.” Regular measurement can keep you focused and make decisions to improve your results.

Telling your story

Communicating to stakeholders internally and externally is also an important consideration.

While the first year reporting was all about the numbers, this year employers are coming to terms with the necessity to embrace the need for change.

Last year over 25% of reporting companies chose not to provide any form of narrative to explain their figures. Many others simply reported the required metrics with no explanation. This was really a missed opportunity; ultimately, it’s probably better to tell your own story rather than let someone else do it.

Perceptions of pay equity are increasingly impacting brand perception and the ability to attract, retain and drive employee engagement. Surveys are showing how many applicants are now looking at a company’s gender pay gap as part of their pre-selection process before choosing to work for an employer.

Ultimately, creating a workforce that is flexible, diverse and inclusive and attracts, retains, develops and motivates talent in the communities in which we work is the goal.

While the first year reporting was all about the numbers, this year employers are coming to terms with the necessity to embrace the need for change and set clear goals in order to demonstrate how diversity is a business imperative for them.

The government has said it expects most employers to take five years to come to terms with the legislation and demonstrate real progress but, as we are well into the second year of reporting, it’s important that your business is not left behind.

About Ruth Thomas

Ruth Thomas is senior consultant for reward specialist Curo Compensation.

3 Responses to Gender pay gap reporting: How to get it right for 2019

  1. Sir 2 Jan 2019 at 3:13 pm #

    My company could reduce the gap by restricting recruitment of women to lower paid roles and ensuring that these are given to men.
    Our upper quartile is in balance 50:50 (almost exactly, as it happens). The GPG within that quartile is -0.67%.
    Our GPG overall is more than 22% – caused by a predominance of women in lower paid roles.
    One solution to our ‘GPG issue’ is as set out above – so be careful what you wish for. GPG – meaningless oversimplification.

  2. HR Man 3 Jan 2019 at 8:21 am #

    I am a male HR manager, and have worked in the profession (for several large companies) for 11 years. During this time I have worked in departments that were always at least 75% female. I have attended workshops on ‘unconscious bias’ and discrimination on several occasions. During the former we were informed that all organisations are riven with sexism – and that this was the reason behind women under-representation in senior management roles.

    The fact that I was siting in a room that was 80% female (this was a successful, multinational company), with the top HR team – all of whom were successful, powerful women – did not seem to detract from the overall message.

    In all my years in HR I have never once heard the HR leadership talk about the under-representation of men in HR. I mentioned it once in a work discussion, and the women laughed. Actually laughed. Could you imagine a female engineer getting such a reception from her male colleagues in a meeting? What would we all make of that? We would of course be horrified.

    If the truth be told I actually like working with women, and seen a great many committed and professional female HR leaders (this should go without saying). My point is simply this: if we are to have this debate about gender disparity we need to be fair and even handed about it. I really don’t think that is so unreasonable – raise this in a corporate setting, however, and you will be laughed at. Strange. And rather sad.

  3. Gareth 8 Jan 2019 at 11:59 am #

    I am a Reward professional who has been working in HR and compensation for 15 years. I appear to be the only one working in HR who sees GPG reporting for what it is – a device which is used to discriminate against people on the basis of their sex. If a woman is paid less than a man it puts enormous pressure on the company to address that through, among other things, larger increases and ignoring material factors. It puts pressure on companies to employ women in more senior positions, even when there isn’t as large a pool of talent available, no fault of the companies of course.

    Men and women are different, so they earn differently – accepting that plain fact is the fair and equitable thing to do, not gender pay gap reporting and all the wonderfully unethical things employers are pressured into dreaming up to ‘close the gap’.

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