Making your gender pay gap report a good news story

The ongoing dispute at the BBC over gender pay disparities has been prominent in recent news headlines and it is clear there is significant public and press interest in this topic. The BBC dispute has, however, highlighted the complexity of the issues around gender equality in the workplace and the potential for discussion about gender pay gaps to be conflated with equal pay.  This was exacerbated by the fact that when the BBC published details of those earning over £150,000 (a government requirement for receiving the license fee), no explanation was provided with the data. For example, it is feasible that some of those at the lower end were working part-time.  Conversely, some of those at the higher end may have received additional earnings from the BBC paid indirectly through production companies. The BBC subsequently published a gender pay gap of 9.3% based on median hourly earnings, significantly lower than the national average of 18.1%.

By 4 April 2018 (30 March for public sector bodies), companies with 250 0r more employees must publish certain information regarding the pay gap between male and female employees. See our quick reference guide for employers and previous article for a more detailed discussion of these obligations. These new reporting obligations present employers with an opportunity to engage with this important topic and highlight the positive steps they are taking to improve gender balance. So what have we learnt from those who have already reported?

Narrate your own story

The minimum data employers are required to publish will only tell part of the story. Whilst not legally required, the government is actively encouraging employers to provide a narrative explaining the reasons for any gap and what is being done to address it. This is an employer's opportunity to put its data in context.  The audience to be considered includes: sector bodies, future recruits, clients, unions and the media, who are already preparing 'name and shame' tables, and potentially employment tribunals who may be presented with a company's gender pay gap report as background evidence in the event of a discrimination or equal pay claim.

Even companies with substantial pay gaps well in excess of the national average have been able to tell a positive story by using the accompanying narrative to provide valuable context. In many cases, gender pay gaps can be explained, at least in part, by wider societal-level factors. These include the fact women have historically been underrepresented in certain industries (construction and financial service companies have reported the highest gaps so far) and are statistically less likely to occupy senior roles. 

The narrative also enables employers to provide additional calculations. Further analysis of the data, such as breaking it down by seniority or job categories, may indicate that a gender pay gap is limited to a particular group. In many cases, employers can show that there is no (or only a minimal) gap within other groups of employees which supports a conclusion that women and men are paid equally for doing equivalent roles. Supporting infographics breaking down staff populations by gender can help convey these messages in a clear and engaging way.

A further consideration that may affect a company's results is working patterns. The national pay gap for full-time employees is 9.1%, contrasted with 18.1% for all employees. According to the Office for National Statistics, there are three times as many women working part-time than men, and part-time jobs tend to be lower paid. Whilst a smaller gap for full-time employees may not in itself be viewed positively, large numbers of part-time women may affect other aspects of the data. Unlike the pay gap which is based on an hourly rate, the bonus pay gap is based on actual sums paid. Employers with large numbers of part-time women may therefore have a wider bonus pay gap and may want to explain this. 

There is nothing to stop employers from voluntarily publishing information for group companies that are below the 250 employee threshold, particularly if this provides a more accurate picture of the organisation overall. Some companies have provided a link to a group-wide supporting statement with the data they are required to upload on the government website which provides additional context. 

The narrative also gives employers a chance to publicise the positive steps they are taking to tackle their gender pay gaps. A major benefit of public reporting is that it allows employers to share ideas and best practices. Examples that have already been reported include obvious steps (unconscious bias training, flexible working for men and women, women's networks and mentoring programmes), as well as more ambitious projects. Some companies have reported on collaborations with industry bodies and education providers to encourage more girls to study STEM subjects. Others have teamed up with peer organisations to develop industry-wide recruitment guidelines that encourage greater diversity. Clearly, employers with initiatives underway that can point to recent progress on gender equality will be better placed to demonstrate their commitment to this issue.

Plan your communications to staff

Gender pay is a complex and sensitive issue. Employers with a gender pay gap – positive or negative - will need to carefully manage how this message is shared with staff. Transparency and consistency will be key. 

Communications should be prepared to accompany the published report which explain the data to employees, and in particular that any gender pay gap does not mean that women (or men) are paid less for doing equivalent roles. An FAQ document which predicts likely areas of concern could be a helpful tool to avoid misunderstandings, damage to employee morale and potential disputes. Manager training may also be beneficial to ensure the message is consistent and managers are well-placed to answer questions.

The success of any plan to improve gender balance will require employee buy-in. When planning staff communications, thought should be given to the most appropriate channels. Digital media, such as short film, slideshows and graphics, could help reach large numbers of employees and aid understanding and engagement in this topic. 

Unlike the pay band information the BBC was required to publish for those earning over £150,000, gender pay gap reports are unlikely to include enough information to enable direct pay comparisons. However, it is worth noting that under the Equality Act 2010, employees are entitled to share pay information to identify if there has been discrimination – regardless of any confidentiality obligations owed to their employer. Employees who make or request such pay disclosures are also protected against victimisation. Discussion about gender pay gaps could inspire employees to conduct enquiries amongst colleagues and HR will need to be ready to respond to any resulting issues.

This is just the beginning…

Although there are no current plans to extend the scope of the regulations, the government has considered reducing the threshold to capture smaller employers. There have also been calls for the government to require companies with gaps above a certain level to report further data, such as pay bands, parental policies and recruitment and promotion demographics. Additional measures, such as race or age, could be included in the future.

As this is an annual reporting obligation, employers will be under pressure to continually improve. And this improvement requires broad commitment. It will not be enough for companies to simply blame their gaps on wider societal and historic factors, or pat themselves on the back if their gap is lower than the national average. The expectation is for employers to genuinely engage with their gender pay gaps and take a proactive role to help close them. With some considered commitments, careful planning and thoughtful communications, employers should have a positive story to tell.