Last minute checklist for gender pay gap reporting

The deadline of April 2018 obliging companies with over 250 employees to publish their gender pay gap data is approaching. The free reporting service that we offer has highlighted the challenges and opportunities raised by the new legal requirement. Whilst many employers do not disagree with its aims, there is a feeling that the legislation is overly complex and more planning is required than many thought necessary.

5 points to consider when finalising your gender pay reporting

The following are key considerations that our clients are addressing before the deadline.

1) Information gathering

Gathering the correct information to calculate the gap often takes time. According to our reward consultant Joe Price, “gender pay gap reporting is even more complex than companies first thought. Considering the breadth of information that has to be included, for instance the different categories of who comes into the definition of ‘employee’, it has been much harder than they anticipated.” Collating the data in the first place is often a bigger task than expected by HR teams who may use multiple payrolls, databases and systems to capture the pay records across the business. This makes it a time-consuming process. Furthermore, interpreting certain aspects of the legislation has required careful analysis, such as what information should be included in calculating the figures. Whilst the figures can be calculated within 10 days, many companies then run these past their in-house legal departments to ensure they have a legal perspective examining the figures. 

2) Understanding the data

According to preliminary results from our UK Reward Management Autumn Survey, the majority of clients see the value in the aims of the legislation and think it is important. Gender pay figures tell one aspect of the organisation’s story regarding equality. For many, a more in-depth analysis of their equal pay position is critical to be able to create a wider picture of how open the business is to equal opportunities. Attracting the right calibre of people through the promotion of diversity is firmly on the HR agenda. Joe Price explains, “the gender pay gap is so topical not just because of the legislation, but because of the wider opportunities legislation like this is trying to create across all organisations. There is a genuine feeling that clients want to do something with their data and whilst calculating their gender pay gap, they often go on to consider age, race and disability.” 

3) Accurately interpreting the gap

The key to communicating the figures is to ensure the company has sight of and is able to explain what is going on behind them, which requires careful interpretation of the gap. Through the exercise of calculating the gender pay gap, some clients have identified organisational issues such as a lack of reward framework that needs to be addressed or a lack of a consistent approach to job evaluation throughout the company which hampers accurate comparisons between roles. An in-depth analysis of the figures through an equal pay audit can be an essential tool in understanding the full picture to be able explain the gender pay gap figures in context. Preliminary results show that over 50 per cent of respondents to our UK Reward Management Autumn Survey plan on conducting an equal pay audit which gives a full picture of all staff and the opportunities open to them. Part-time workers are a good example of where there has traditionally been the highest gap in gender pay for groups that perform the same type of work. Whilst part-time workers have traditionally included a higher percentage of female employees, the legislation aims to highlight how a female part-time executive can do their job within their agreed hours to ensure they are given the same opportunities within the business. 

4) A clear communications strategy

A key concern of clients is how to explain the figures to internal staff and trade unions. Respondents to the UK Reward Management Autumn Survey identify that most of the issues posed by the publication of the data centre on grappling with the issue of internal communications and effectively explaining to employees what the gap means. Importantly, there are a number of non-discriminatory reasons why pay gaps might exist including pay progression, pay protection, performance pay, competency pay, premiums and allowances. Genuine reasons for the gap must be identified as part of the communications planning to guide the picture these statistics paint alone. Rational and well-planned communications are critical in handling the publication of data in a proactive and positive way. It is important that companies can identify how they will move forward to close the gap. 

5) Selecting a publication date

25 per cent of respondents to the Autumn Survey said it was too early to tell when they plan to publish their gender pay data. This raises the question of ‘why choose to wait’ which is hopefully explained by organisations making sure that they can articulate exactly what the gap means and come up with an action plan to address it. Any responses which intend to move over or underpaid employees in the pay scale must be carefully considered in light of current employment obligations to staff and in terms of staff engagement. Breach of contract and constructive dismissal are all claims that could be triggered by a rushed response, whilst reducing pay is certainly a potential source of dissatisfaction in the workplace. Considered responses are key to working towards the ultimate goals of the legislation in achieving a fair pay and reward environment.

These key trends emerging from working with our customers highlight the importance of planning ahead when it comes to reporting. Find out how we can help you meet your reporting requirements.

Find out more about our free gender pay reporting service