We know it’s coming in 2016, but only a small percentage of companies are prepared for gender pay reporting changes.
Starting in late 2016, organisations with 250+ UK employees will be required to report on their gender pay gap. The burden of uncovering the necessary data, communicating findings and implementing strategies for narrowing the gap will typically fall to the HR department. So what should HR managers be doing now to prepare?
The first step is to attend one of EEF’s Gender pay reporting - how to comply courses.
Here are a few other steps HR can take now to ensure they’re getting ready:
View it as an opportunity
Many HR managers will dread the data collection & analysis and potential policy changes required by the gender pay reporting requirements. However, smart managers will view this as an opportunity to gather important data and identify opportunities for improvement. Companies that fully embrace this opportunity can expect to have more innovative and forward-thinking policies that attract and retain employees.
Gather your data
You can’t report what you don’t know.
EEF’s recent gender pay gap member survey found that 60 percent of these organisations have not undertaken a pay audit in the last five years or longer. Companies therefore need to do the work to analyse and understand their particular gender pay gap. Don’t be surprised if the picture painted by the data isn’t pretty. Based on the latest government data, the national average gender pay gap was 19.1%, meaning that for every pound a man earns, a woman earns 81p!
The 19.1% figure is the figure for all employees (including full-time and part-time). There are various other ways of breaking down employees. Consider looking at:
Remember, a gender pay gap is not the same as unequal pay, which is unlawful.
Remember, a gender pay gap is not the same as unequal pay, which is unlawful. Equal pay law provides for equal pay where women and men do work that is the same or broadly similar or that is rated as equivalent under a job evaluation scheme or is found to be of equal value. On the other hand, a gender pay gap is the average difference (i.e., without comparing like with like) between what men and women are paid. But, a gender pay gap is often an indicator of equality issues within the workforce.
Once you’ve gathered the data, you should turn your attention to addressing the gap through effective policies that shrink the gap and maximise benefit to your organisation. This is the time to bring in an expert. There are HR and employment consultants that offer business support services specifically geared towards almost any industry. (For example, EEF’s specific insight into the UK manufacturing industry’s best practices and challenges help us advise our clients on employment issues as effectively as possible.)
An expert can help:
benchmark your organisation’s gender pay performance and salary/pay scales compared with your competitors, region and industry
undertake an equality risk assessment of your pay data to identify where risks exist within the business and strategies for mitigating those risks
introduce a job evaluation scheme and review job descriptions
review existing rewards strategies to ensure they are fair and transparent
create a training plan for management aimed at tackling gender pay and equality issues
determine the ideal way to report and disseminate gender pay gap data and the company’s new gender pay strategy internally and externally
Communicate your narrative
Although the government has not yet clarified exactly what and how data must be reported, it does recognise that many companies will want to provide some additional narrative that provides context, explains any gender pay gaps and sets out opportunities for improvement and their current and future plans for addressing the gap.
The gender pay gap data won’t just be viewed by the government, but also by the press and NGOs who will likely compile data and benchmarks for different industries. Therefore, HR managers should develop a strategy for communicating their gender pay gap internally before the data is available (and digested) publicly.
Even if the final details of the gender pay gap reporting requirements won’t be known until early next year, companies looking to stay ahead of their competitors and impress their stakeholders should be well prepared with their data analysis and strategies in advance. No matter the specifics, the government is clearly committed to narrowing the gender pay gap and no one wants to be left behind.
HR managers should consider EEF’s half-day EEF’s Gender pay reporting - how to comply courses at locations across the UK running this autumn.