Gender pay gap reporting – it’s still important…

In March the UK government suspended enforcement of this year’s obligation for employers with 250 or more employees to publish figures about their gender pay gap. The decision meant there was no expectation on employers to report their data in 2020; the requirement will restart in 2021, skipping one full year of reporting.

Does that mean we should consider the matter closed until next year or would employers be wise to still calculate their 2019/20 pay gap now?

Many businesses have welcomed anything the government can do to relieve other pressures and allow them to focus on the immediate challenge of Covid-19. HR teams have never been busier, whether it’s furloughing staff or supporting line managers with leading their teams remotely. Very little time has been left for anything else.

2020 gender pay reporting submissions are down by almost half compared to 2019. As at the end of May, 5,554 employers had published their gender pay gap for 2019/20, down from 10,828 for 2018/19. Taken at face value this is a disappointing drop, but it’s worth noting that after the suspension was announced, around 2,000 employers still decided to publish their data. Good for them and here’s why!

The gender pay gap is a problem that matters

Much of the focus in 2020 has rightly been on Covid-19, but that doesn’t mean long-term challenges such as global warming and the gender pay gap no longer matter. The gender pay gap for all full-time employees was 8.9%, changing very little from the previous year. The charity Turn2Us has recently reported that the pandemic crisis is having a disproportionate impact on women’s pay and may lead to an increase in the pay gap. For all its imperfections, the UK’s mandatory gender pay gap reporting is a tool to help solve the problem and an important symbol for companies to show their employees (and everyone else) that they take it seriously.

Gender pay equality makes business sense

The business case for gender pay equality should be true both in good economic times and bad. Over the past decade more and more studies have shown that maintaining a focus on equal pay makes good business sense and companies who take action to promote gender equality show increased profitability (McKinsey, 2015). With an eye to the longer term retention of high performing employees, the importance of ethics and shared values, alongside employee engagement, will not disappear and a commitment to gender pay equality is a key component of that agenda.

Make life easier for yourself in 2021

Collating the data is only part of the challenge for employers when completing their gender pay gap submission. Organisations are also expected to add a supporting narrative to help anyone consulting the data to understand why a gender pay gap is present in the organisation and what they intend to do to close it. By not taking time to look at 2019/20 data, it could make a difficult task even harder in 2021, with supporting knowledge potentially being lost to explain changes between 2018/19 and 2020/21.

In 2020 good news in in short supply

If you’re an employer who takes gender pay seriously and has a good story to tell about the steps you are taking, let your people and the world know about it.

Recommendations

1. Remember to keep long-term challenges in mind, including your organisation’s gender pay gap. The issue of reducing inequality is both a moral and business one
2. Conduct the analysis and determine the statistics this year, even if you decide not to publish. It is likely that some work will have already been done on it, so don’t waste that effort. You’ll feel the benefit in 2021 when you do your 2020/21 submission.
3. Even better, voluntarily submit your 2019/20 gender pay gap data and show your employees and the world at large that your company is committed to taking gender pay equality seriously.

If you need support with your equality agenda, get in touch.