In February 2016, the government unveiled its much anticipated draft regulations on gender pay gap reporting. Organisations with more than 250 employees will be required to publish gender pay and bonus gap data on their website, in addition to information about the number of male and female employees across pay brackets. Employers will be expected to calculate the gender pay gap from April 2017, and from 2018 these figures will be used to rank firms and industry sectors in gender pay gap league tables, shining a spotlight on the best and worst performers.
Some say the draft regulations do not go far enough, arguing that the data required is too broad to effect meaningful change, there are no clear sanctions for non-compliance, there is still so long to wait until the reporting becomes obligatory, and even then it will only apply to larger firms.
Meanwhile, others have suggested that the use of league tables could put women off the very industries the government wants them to enter, or push businesses to implement quick fixes rather than structural and cultural solutions, thereby further aggravating the problem in the long-term.
Public league tables are an interesting concept, and given the contentious nature of the level of data they will be based on, also a potentially problematic one. Yet if employers go beyond the basic requirements and accompany their datasets with more detailed breakdowns and explanatory information, as well as outlining the steps they are taking to improve the situation, then they could actually help dispel potential misconceptions about which businesses and sectors are taking a progressive and proactive stance on gender pay.
Organisations that are not seen to be transparent or that fail to address the gender pay gap do so at their peril; they may not face legal or financial sanctions but they may risk alienating prospective and current employees, fostering disengagement among their workforce, and damaging their reputation as an employer, business and even as a brand. Indeed, Glassdoor’s Global gender pay gap survey, published in February 2016, found that 66% of UK respondents are unlikely to apply to work for an organisation that they believe has a gender pay gap. This rises to 76% among female respondents and 80% among 18-24 year olds.
One of the less remarked upon aspects of the draft regulations is that senior executives must sign off the gender pay gap data for their organisation each year. This measure could help garner board-level buy-in for strategies to tackle the pay gap and encourage a visible, top-down approach to material and cultural changes within the workplace.
Before employers decide on their approach however, they must identify if and where gender pay disparities exist within the organisation, and unpick the root causes. So while there may be more than a year to go until the government’s regulations are expected to take effect, there is no time like the present to analyse and act.