Gender pay reporting for manufacturers: the importance of context

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Given the extensive media coverage, it is unlikely to have escaped employers’ notice that the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (the Regulations) come into force on 6 April 2017. As we report here, the Regulations require all employers with at least 250 employees as at the 5 April ‘snapshot date’ to report on a variety of metrics concerning gender pay equality in their organisation.

Although the Government decided not to introduce civil penalties for those who fail to comply with the Regulations, employers should not underestimate the importance of gender pay reporting. A survey of over 1,000 employees conducted by Business in the Community found that 92% said they would use gender pay gap information if they were looking for a job and deciding between two employers; and more than half of female employees would favour a company that was more proactive in closing their gap.

For employers in the manufacturing sector, this is especially significant. Based on the 2016 figures from the Office for National Statistics, EEF calculated the median gender pay gap for full-time employees in our sector as 18.8% – double the 9.4% national average across all sectors. It is therefore positive to note that in our survey of manufacturers (conducted in September 2015, when consultation on the proposed gender pay reporting legislation was ongoing), as many as 47% said they saw gender pay reporting as a great opportunity to benchmark themselves against peers and other industries, while 38% said that the work they would need to undertake to provide the data would help them to get to grips with their pay structure and auditing. Over a quarter (26%) said that gender pay gap reporting would provide the impetus they need to overhaul their pay structure and to establish better processes.

At the same time, however, 68% of the companies surveyed said that women make up 30% or less of their workforce and there is recognition that this could cause a problem when reporting. A third (32%) agreed that industries struggling to attract women into skilled roles are likely to have a wider gender pay gap. It has also been widely recognised that the complex pay structures that often apply in our sector are likely to make reporting practically difficult for many employers, and reduce comparability between different organisations.

With this in mind, it is impossible to overstate the importance of context. The Regulations do not require employers to publish any explanation for their gender pay gap figures, or details of any measures they might be taking to reduce the gap in their organisation. However, for manufacturers, such context is key to ensuring that gender pay reporting doesn’t make it even harder to attract skilled women into industries such as ours where they are currently under-represented. Indeed, many employers in our sector are already taking positive steps to improve gender diversity and, with it, gender pay equality – and this is something they should highlight with pride in their gender pay reports.

Author

Senior Legal Adviser

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