The Employer's Guide to Gender Pay Reporting
Although the 5 most powerful people in the UK are women, this progressive stance still fails to translate into industries across the nation. We take a look at just how wide the gender pay gap is, and how Gender pay reporting has been designed to hold businesses accountable.
So just how bad is the gap?
Britain’s pay gap has failed to significantly narrow for many years. According to the Office of National Statistics, the gap was at 9.4 percent in 2016, just a slight decrease from the 10.5 percent five years ago.
Although the gap for full-time and part-time employees has been narrowing steadily, it was still 18.1 percent in 2016. That gulf reflects how part-time workers – both men and women – earn less on average per hour than their full-time counterparts. What makes the figure significant is how a much higher proportion of women work part-time. One analysis, by consultants Deloitte, estimated that at this pace the pay gap will not be eradicated until 2069 – or 99 years after the Equal Pay Act.
Although the pay gap between men and women in their 20s has narrowed down to 5 percent, research by the Resolution Foundation found that the pay gap between men and women’s earnings increases when women reach the age of 30 and are expected to start a family.
What the legislation entails
To make the calculations, you will need to gather specific data from your company’s payroll. The figures you will need to calculate are as follows:
- Mean gender pay gap in hourly pay
- Median gender pay gap in hourly pay
- Mean bonus gender pay gap
- Median bonus gender pay gap
- Proportion of men and women receiving a bonus payment
- Proportion of men and women in each pay quartile
You can find out how to calculate the figures here!
The 6 steps to writing and publishing a report
Once you have completed your calculations, you will need to convert your data into a report to be published on your company’s website or a designated government website. Below is Personnel Today’s step-by-step guide to help you achieve just that.
1. Explain what the gender pay gap is, and why it needs to be published
Employers should introduce their gender pay gap report by explaining that legislation requires them to publish details annually of their gender pay gap. The introduction should clarify the time period covered by the report.
2. Highlight the 6 metrics required by the legislation
Employers should set out the six key metrics that are necessary under the rules on gender pay gap reports. These are:
- The difference in the mean pay of full-pay men and women, expressed as a percentage.
- The difference in the median pay of full-pay men and women, expressed as a percentage.
- The difference in mean bonus pay of men and women, expressed as a percentage.
- The difference in median bonus pay of men and women, expressed as a percentage.
- The proportion of men and women who received bonus pay.
- The proportion of full-pay men and women in each of four quartile pay bands.
The statement should also confirm that the figures have been reached using the mechanisms that are set out in the gender pay gap reporting legislation.
3. Focus on the underlying causes of the pay gap
Although it may not be compulsory for employers to publish a narrative that explains their gender pay gap figures, it is advisable to put the figures into context in order to avoid potential reputational damage. Here are some examples of what the underlying causes could be:
- The organisation struggles to recruit women in a traditionally male-dominated industry (for example, science and technology).
- Women are more likely than men to have had breaks from work that have affected their career progression.
- Women are more likely to work part time, and many of the jobs that are available across the UK on a part-time basis are relatively low paid.
The employer could also highlight the male/female make-up of the four quartile pay bands. The effect of career breaks and part-time working to look after children may have affected women’s career progression within the organisation, meaning that the higher-paid bands are made up predominantly of men.
4. Explain how the employer's gender pay gap looks against the wider picture
Employers could use their supporting commentary to explain how their figures compare with the gender pay gap of other organisations within the same sector, or compare with the wider economy. This could include highlighting that other organisations within the same sector have the same problem or mentioning the national average. If the employer’s gender pay gap looks good against these other figures, this should be a positive focus for the supporting narrative.
5. Say what the employer is doing to address the pay gap
The employer could use its supporting statement to set out any actions that it is taking, or plans to take, to address its gender pay gap. Committing to review its policy on bonus payments is one example of an action an organisation could take. This will be particularly important where there are few mitigating factors to explain a wide gap. Employers can also explain what other steps they are taking to improve gender diversity. This could involve running initiatives to improve support for women returning from maternity leave, to increase their chances of career progression further down the line.
6. Have a senior figure sign off on the gender pay gap report
For private- and voluntary-sector employers, the report should conclude with a written statement confirming that the information is accurate. The statement of accuracy must be signed by a senior figure within the organisation. This could be a director, or the employer could choose to give the statement extra weight by having it approved and signed by the CEO. This requirement does not apply to public-sector organisations.
When Theresa May addressed an International Women’s Day reception in Downing Street, she said, "We've now got the lowest gender pay gap on record and more women in work than ever before, but of course, while it's right to celebrate those achievements, there is still more to do." This is a reality that many employers will need to come to grips with as they set out to collect and interpret the data regarding the gender pay gap. By finding the cause, we can find the remedy!
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