Wake-up call: gender pay gap reporting – is your business ready?

Time is nearly up to publish your pay gap report, but it’s not too late to mitigate any potential consequences, says Caroline Glacken

The problem
By 4 April 2018 all large businesses (those with 250 or more workers) must publish their first annual report on the gender pay gap within their organisation – the difference between women’s and men’s average pay.

The vast majority of businesses will have a gender pay gap, with the national gender pay gap currently standing at 18.1%, although the gap is believed to be narrower in the hospitality sector. Women tend to earn less in operational roles and generally fill fewer managerial roles.

Expert advice
There are six metrics set out within a gender pay gap report. These are a fairly blunt measure of gender pay disparity with no explanation of any underlying reasons for statistical difference in pay. However, with the gender pay gaps of some well-known businesses already making headlines, it is no surprise businesses are concerned about the potential consequences of publishing a report.

It’s not too late to mitigate against the effects of publishing a negative report, but firstly engaging with the obligations is vital.

To-do checklist
Prepare the initial set of data within the six required reporting metrics, which are:

  • the difference in mean pay between men and women;
  • the difference in median pay;
  • the difference in mean bonus pay;
  • the difference in median bonus pay;
  • the proportion of men and women receiving bonus pay; and
  • the proportion of both across four quartile pay bands – the upper quartile, the upper middle quartile, the lower middle quartile and the lower quartile.

2 Assess the extent of any gap and the risks in publication, such as reputational damage and the impact on tenders and employee relations.

3 Brief a senior executive as soon as practicable, as they will be required to confirm the accuracy of the figures by signing the report.

4 Consider expanding on the metrics within the voluntary narrative section of the report to present a more accurate and positive picture:

  • Include other statistical measures, such as calculating part-time salaries on a full-time equivalent basis, or breaking down numbers by grade, age or length of service.
  • Summarise any programmes and initiatives your business may have in place to support the progression of female employees, particularly into managerial or senior roles and any further objectives it has in this area.
  • In the run-up to publication, consider the need for an internal communications plan with employees, and make sure you fully brief your internal communications team.
  • You may also consider an external communications plan if you have a particularly positive message to tell. Sodexo published its report early with a gap of 7.65% – far below the national average. Conversely, if there is a risk of negative publicity, it will help to be prepared.
  • Ensure the report is signed off by a senior executive and published on the company website by 4 April 2018.

Beware
Don’t stop there: begin to analyse data for the next report, due by 5 April 2019. This report will cover the period 4 April 2017 to 5 April 2018 and it may be possible to take some steps now to narrow any gap.

If you have established a significant gender pay gap, it will be important to prepare an action plan to try and improve matters. This should set out the proposed steps to narrow the gap and identify a member of senior management responsible for implementing the action plan and monitoring long-term compliance.

This article was first published in The Caterer.