Gender pay gap reporting is an opportunity, not a burden. Instead of being seen as merely a tick-box exercise, it presents an opportunity for businesses to earn their employees’ trust and set themselves apart from the crowd.
Unless you’ve been living under a rock, by now you’ve heard of the gender pay gap reporting legislation which requires all organisations with 250 or more employees to publish their gender pay gap data every year.
Organisations should start thinking early on about how they’re going to communicate with their employees and other key stakeholders, both now and on an ongoing basis”
Gender pay gap reporting is an important tool for organisations to better understand the differences between the average pay of men and women, why the gap exists and then take actions to close it. But more than just addressing the pay gap, it can encourage employers to be more inquisitive about their workforce.
According to Charles Cotton, Performance and Reward Adviser at the Chartered Institute of Personnel and Development (CIPD), the process encourages employers to become savvier about capturing data and how they can use it to create value for employees and the organisation.
Charles says: “It allows organisations to start thinking more strategically about what they are doing and ask the important questions: what makes our employees tick? What, how and why are we paying them? Do we have a handle on employee engagement and turnover? Do we know why people may be unhappy with their pension offering, etc.?”
However, gender pay gap reporting is more than producing the right data, in the right way, at the right time. Communicating the story behind the gap is just as important. Employers need to think about what the message is and carefully manage how it is shared with employees.
So, how can organisations ensure their policies and messaging around gender are clearly communicated internally?
Plan your communications
“Organisations should start thinking early on about how they’re going to communicate with their employees and other key stakeholders, both now and on an ongoing basis,” says Charles.
“Are you going to publish a narrative, or augment it by meetings? Are you going to have Q&A’s? If you do have meetings, what kind of support do you need to give your line managers?
“Whichever route you choose depends on the nature of the organisation,” explains Charles. “People like engaging in meetings but if you have an organisation with employees in different locations or shift patterns, it can be harder to get these people together. So it’s important to factor in how you overcome those challenges from the outset.”
And rather than outsourcing the task to HR or payroll, it’s important that all key business functions – from brand and finance to legal and compliance – are involved in creating an accurate narrative and realistic action plan that will ultimately trigger change.
A good starting point is to make sure employees understand the difference between equal pay and gender pay gap (which is not the same thing), and how ‘means’ and ‘medians’ are calculated.
To avoid confusing and misinforming employees, it is also important to provide any additional information. The narrative can be used to explain the mix of factors that are causing the gap, from workforce population, to industry context and occupational segregation.
Shell is a great example of a company who goes beyond the figures. To coincide with its gender pay gap report, the oil company released a short video to demonstrate how a gender pay gap may arise due to employee demographics, and highlight the commitments they are making to eliminate it.
Show you’re taking action
In addition to explaining the figures, it is increasingly important for organisations to outline what they are already doing to address the gap or create an action plan which sets realistic and measurable targets.
“Companies need to figure out not only what they can do within their organisation but also what they can do in collaboration with other organisations to tackle occupational and industry imbalances,” says Charles.
Apart from releasing a video, Shell has established itself as an industry leader by launching initiatives to try close the gap. They are sponsoring scholarships for women entering STEM fields, and have also launched a 12-month social media-led campaign to open the discussion on the gender pay gap in engineering and technology.
The introduction of gender pay gap reporting is the first step in a long road towards greater transparency. Legally the report needs to be updated and published each year, but it is important to engage with employees and keep them regularly updated on what active steps are being taken to close the gap. Smart organisations will realise that a consistent narrative and a culture that supports equality go hand in hand with attracting and retaining great talent.
What’s the difference?
A legal requirement whereby men and women in equal or similar roles must receive equal pay and other workplace benefits.
Gender pay gap:
The measure of the difference in the average earnings of men and women across an organisation, business sector, industry or economy as a whole. In Britain, there is an overall gender pay gap of 18.1%.
The CIPD is the professional body for HR and people development. The not-for-profit organisation has more than 145,000 members worldwide and provides thought leadership, independent research, training and accreditation for those working in HR, learning and development. CIPD offers resources on gender pay gap reporting which are free to download here.