What does gender pay gap reporting mean for my business?

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The government requirement for gender pay gap reporting has arisen from the ongoing discrepancies between male and female pay for jobs of equal value.

Gender pay gap reporting, therefore, seeks to identify discrepancies in pay so that organisations can begin to acknowledge and rectify the difference where appropriate. Putting the spotlight on the gender pay gap presents an excellent opportunity for UK employers to demonstrate that they are, or are taking action to become, UK employers of choice by ensuring a ‘fair day’s pay for a fair day’s work’, irrespective of gender.

Mind the pay gap

The UK has the 12th widest gender pay gap according to The Organisation for Economic Co-operation and Development (OECD) with their research showing that women 50+ have the largest gap. The Office for National Statistics (ONS) 2023 data reveals that the gender pay gap for all employees was 14.3%. ONS research also found that the full-time gap was 7.7% and the part-time pay gap was 3.3% (with women earning more).  

Whilst positive steps are being taken by organisations globally, the World Economic Forum predicts it could take another 170 years to achieve parity if we continue to move at today’s momentum. This has serious implications for businesses wanting to minimise the opportunity for industrial action and complete for top talent. 

Reasons for the pay gap are vast and complex. For example, women are typically more likely to work part-time, which can mean a lower rate of pay pro rata. Women are also underrepresented in senior roles that tend to command high salaries. Interestingly, for younger employees, in their 20’s the gap is 2.25%. This gap significantly increases for women in their 30’s (arguably when women are starting have or are well into family life) reaching 4.7%. The gender pay gap for women aged 60 or over is currently the largest at 14.2%.  

 It has been revealed by the CIPD that 17% of large firms are not reporting their gender pay gap. With firms that employ between 250 and 499 people are the most likely to admit to not carrying out gender pay gap reporting in 2023. This report is required in the UK due to regulations introduced in 2017, require employers with 250+ employees to publish six specific average metrics showing their pay gap and bonus gap using calculations set-out in the regulations: 

These include…

  • Average gender pay gap as a mean average 
  • Average gender pay gap as a median average 
  • Average bonus gender pay gap as a mean average 
  • Average bonus gender pay gap as a median average 
  • Proportion of males receiving a bonus payment and proportion of females receiving a bonus payment 
  • The proportion of males and females when divided into four groups ordered from lowest to highest pay. 

Both ‘Ordinary’ pay (allowances, leave etc) and ‘bonus’ pay (remuneration such as commission, incentives, share options etc.) are to be considered when calculating the gap. 

This report must be published on the UK Governments gender pay gap reporting service website. With private and voluntary sector employees must make sure that the information is accompanied by a statement confirming its accuracy, signed by a director or equivalent.  

The report also must be published on your own organisations website in a place that is accessible to both employees and the public, and tit must remain there for at least three years.  

If you do not comply you are in breach of the Equality Act 2010 and therefore open to action by the EHRC. The EHRC have a series of actions and penalties they can impose on organisations depending on the type of business and nature of the breach.  

And the reputational risk to organisations failing to provide the required transparency should not be underestimated. 

What steps can I take to help my business? 

  • Do you need to report, i.e. how many employees do you have? Take contractors/temporary staff into consideration here and do they need to be included? 
  • Ensure your systems, payroll, in particular, are able to quickly and easily produce the data you need, specifically by gender 
  • Note the timing of payments including bonuses/incentives 
  • If systems are already in place, run a test using a previous pay period as a calculation to identify areas of risk 
  • If large gaps are uncovered, try and decrease these as quickly as possible 
  • Share your processes with other similar businesses and you may be able to improve your own

How we can help you.

It might seem like a big task, but it doesn’t have to be. All you need is your data (check) and the tools to do the job (that’s where we come in!). 

We like to take the administration out of HR so that you can focus on adding value. We’ve built the gender reporting requirements into our software so that you can have your data, however, you might like to see it, in real time at the click of a button. 

Sounds simple? It is. If you’d like to know more about how it works, book a demo today.