Why wouldn’t you want to know your own pay gap?

Companies with fewer than 250 employees or companies in Northern Ireland^* may feel that they are free to ignore gender pay gap reporting and that it’s a waste of time and effort even calculating their gender pay gap. However, I can think of 3 main reasons for wanting to know your gender pay gap:

• There is a business imperative;
• You need to walk the talk;
• Prevention is better than cure.

It is true that companies with less than 250 employees and those in Northern Ireland are not currently required to comply with the gender pay gap reporting regulations which have been in place in the UK since 2017 but put yourself in the shoes of a prospective employee doing background research on your company. They work their way through your company website:  background, mission, values, statement on diversity, inclusion and equality, etc. but gender pay gap reporting information is conveniently missing. Prospective female employees do not just want to know that they will receive equal pay, but also that the company’s policies and practice allow for equal career and development opportunities. The best and clearest indicator of this is a gender pay gap analysis.

If you have a company position on equality and diversity, then you need to back that up with something. Your policies and practices need to be aligned with your diversity and inclusion intentions and gender pay gap reporting or equal pay audit information will serve to validate this. You need to walk the talk and not just talk the talk. For example, advertising positions with an essential criterion of a 2:2 degree is not, in my view, consistent with this policy. Publicly touting company diversity and inclusion events and activities but not publishing your gender pay gap information is not consistent with this policy, or worse, may lead people to think that you have something to hide. Even if you have no legal obligation to comply with the gender pay gap reporting requirements, you do have a legal obligation to ensure that your pay is fair and equal. If you have completed an audit and have been given the all-clear then why not communicate that information on your website?

Gender pay gap reporting is not simply a compliance exercise. It is part of a company’s equality, diversity and inclusion efforts and it is important to the future of the company and its employees. It reflects poorly among current and prospective employees, customers, investors and your brand if you ignore gender pay gap reporting. For business reasons, therefore, you may wish to apply for the Legal Island Diversity and Inclusion Charter Mark or become an endorsed employer and this will entail preparatory work similar to that of gender pay gap reporting. As far as equal pay is concerned, you risk breaking the law by not conducting an equal pay audit and ensuring equal pay for equal work.

In medical parlance, prevention is better than cure. If you have done your due diligence regarding equal pay and/or gender pay gap reporting, then you will be prepared to respond to enquiries about equal pay and you can be the one to introduce this topic to the workforce. You will have time to conduct the necessary analysis as well as consider any remediation efforts that may be required. You will be able to craft the message you wish to convey to employees instead of being caught off guard by a prospective employee or equal pay query.

Finally, aside from the benefit of being able to respond to prospective employees, why would you not want to know how well your policies and practices stack up with your equality and diversity aims? Why would you wilfully ignore a calculation that could point the way in identifying areas that require intervention and which, over time, could track your progress in this important area?

Notes

• *Legal provision has been made for regulations on gender pay gap reporting in Northern Ireland and now that the Executive is back up and running, gender pay gap reporting may soon be brought into force.
• To calculate your gender pay gap use this free excel template from Nigel Marriott. Even for small companies, this tool will provide a useful analysis of employee demographics – whether or not the pay gap figure is statistically reliable.
• An equal pay audit tool should also be available shortly from Responsible Reward. This tool is clearly relevant for all sizes of company.
• If you are unsure what the difference is between the gender pay gap and unequal pay, Nigel Marriott has written a clear article explaining why they are not the same thing.