With just over three months to go for companies to produce their gender pay gap report and with over 400 businesses having already done so, Mark Childs, Managing Director, Total Reward Group at Arthur J. Gallagher declares now is the time to prepare a strong communications strategy. It will make the world of difference to a company’s corporate reputation and, hence, recruitment and retention
Corporate brand or image is no longer dictated by organisations, it’s bestowed upon them by employees. But if companies are doing the right thing by their employees, they can generally rest assured their reputation will remain intact. Gender pay gap reporting represents an opportunity to do just that. And to come out the other side with an image that is not only unscathed, but maybe even bolstered.
Many companies will no doubt be concerned about publishing certain facts and figures right now. The key is to be honest and open whilst, at the same time, communicating clearly your plan for improvement. If you don’t do this, the very real alternative could well be public naming and shaming.
More than facts
It’s likely that the majority of companies will simply look to explain or justify a gender pay gap along the lines of: women tend to work in less lucrative occupations and sectors; more women than men work part-time; and women’s careers are impacted by taking time out for a family.
Whilst these reasons are factual, they are not necessarily sound. Should the status quo be unquestionably maintained? Also, simply stating the facts won’t tell your employees anything about what you’re going to do to rectify any inequalities that exist.
Top tips for a stand-out report
- View gender pay gap reporting as a chance to effect change – from the way you recruit to the way you promote - rather than just a paper exercise.
- As part of this, question current policies and procedures, don’t simplify: look to explain or justify them.
- When considering the root causes of gender pay gaps, investigate long-term issues such as career progression, not just pay levels.
- Control the narrative. What matters most is that you have targeted actions in place, to protect and enhance the employer brand.
- Remember that analysis of jobs and pay is only the start. It provides a window into the internal labour market as well as your pay practice, but it doesn’t solve things.
- Consider an action plan. It might not be a requirement of reporting but it’s important to bear in mind that you’ll be judged by what you do, not what you say. In other words, you’ll want to show improvements against the benchmark year on year.
- Compare your organisation against others in your sector rather than the national average in order to gain more meaningful insights.
- Go the extra mile. Consider your broader diversity and inclusion programme and look at extending your reporting to ethnicity and disability now. Don’t wait to be told. The Equality and Human Rights Commission made suggestions to this effect recently in its report Fair opportunities for all: A strategy to reduce pay gaps in Britain.
- Examine ways to make your pay and reward strategy as fair and transparent as it can possibly be. Just remember employees are the ones in control of recruitment and retention these days.
- Finally, if you are a global company headquartered in the UK, consider reporting on all subsidiaries, regardless of whether gender pay gap legislation – or any equivalents – apply in those countries.
What do you need to do?1
If you have more than 250 staff, you have until 4 April 2018 to publish on your website - and on the government’s reporting website https://www.gov.uk/report-gender-pay-gap-data - details of:
- Your gender pay gap (using data as at 5 April 2016). This will highlight in percentage terms the difference between male and female pay across the organisation. All taxable income and bonuses should be taken into account, whether short-term variable, commission, annual bonus or sign-on bonus. Salary sacrifice arrangements, benefits in kind and loans to employees – for example a season ticket loan – are disregarded.
- Your gender bonus gap – that is the difference between men and women’s average bonus pay over a 12-month period.
- The proportion of men and women who received a bonus in the same 12-month period and in each quartile of their pay distribution.
- The pay information must be based on data from a snapshot date of 5 April every year, beginning with 5 April 2017.
- The bonus information must be based on the preceding 12-month period, beginning with the 12 months leading up to 5 April 2017.
- The public sector duty mirrors that for the private and voluntary sectors, with one significant difference being that the snapshot date for gathering data each year is 31 March, not 5 April.
1 The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 http://www.legislation.gov.uk/uksi/2017/172/contents/made