Gender pay gap reporting: take 2

Although the novelty may have worn off, this year's reports are already attracting media interest, as they will give businesses the opportunity to demonstrate progress since last year's figures were published. The BBC has reported that 4 in 10 firms which had uploaded this year's data by 19 February were reporting a wider pay gap than last year. Of course, the reasons for this will vary and in many cases will not imply any discriminatory practices – for example, one firm explained that female employees are more likely to opt for salary sacrifice benefits, distorting the figures.

However, as a wide gender pay gap may have a negative impact on reputation, recruitment, involvement in tendering (particularly for public sector contracts) and staff morale, businesses would be well-advised to take steps to narrow such gaps. The Government has recently published two useful pieces of guidance for businesses looking to do so.

The Government guidance 

The first useful piece by the Government suggests how businesses can identify the causes of pay imbalances by analysing key data such as performance and promotions data, assessing whether part-time staff are adequately supported to achieve career progression and whether male and female employees receive the same level of support with caring responsibilities. In our experience, businesses of all sizes struggle with these issues and any business which is looking to improve its gender balance could usefully undertake this analysis, regardless of whether it is obliged to report pay gap figures. Equally, gaining a clear understanding now of how current pay structures and working practices impact on gender balance may well be useful to larger businesses if and when ethnicity pay gap reporting is introduced (a Government consultation on this concluded in January this year).

The second sets out how businesses can develop an action plan to address any gender pay imbalances, i.e. analyse the data and identify action points, consult and engage with staff, adjust the plan following feedback from staff and then implement it. Although none of this is rocket science, many businesses will find the structured approach helpful.

Above all, the guidance emphasises that narrowing a gender pay gap will likely take time – but that investing time and effort in improving opportunities for female staff (particularly those with caring responsibilities, which is often a major underlying cause of pay gaps) will reap dividends for the business.