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CIPD Voice: Issue 13
Since April this year, employers with 250 or more people have been required to disclose the size of their gender pay gaps. At the time of writing, out of a total of 9,000 eligible organisations, just 257 have reported on gap in the six different ways required in the law: the mean and median gender pay gaps; the mean and median gender bonus gaps; the proportion of men and women who received bonuses; and the number of men and women according to quartile pay bands.
Does the low number of companies that have reported at this stage, now over six months since the law came into effect, mean that this initiative is in trouble? Not necessarily. Organisations operating in the public sector have until the 31 March 2018 to report, while employers based in the private and voluntary sectors have until the 5 April next year. Rather than dodging their responsibilities, employers may just be planning to publish their figures later this year, or early next, to coincide with the publication of their annual report and accounts.
Another explanation is that how the figures are published may also have become an issue for employers. While there is no obligation for organisations to publish an accompanying narrative that provides context, tells employees what gender pay gap reporting is, explains any pay gaps, and sets out the actions that will be taken to address any significant gaps, many employers recognise the value of doing so.
Gender pay gap reporting is not just about producing the right data in the right way and at the right time. Just as important is the story behind the gap and how it is communicated internally and externally, both before and after the data has been published.
The CIPD has produced a guide to gender pay gap reporting which recommends that employers prepare for disclosure by creating a communications plan that identifies: the narrative's aims (the why); its key messages (the what); key audiences (the who); communication channels (the how); and timing (the when). Our guide also encourages employers to consider the risks (such as damage to the employer brand in the eyes of its current or potential employees, or injury to the organisation’s reputation in the eyes of its clients) and how these may be managed and mitigated by the communication plan.
One organisation that has used the guide to report on its gender pay gap is the CIPD, perhaps unsurprisingly given our purpose of championing better work and working lives through improving practices in people and organisation development, both as an employer and as a professional body. Our mean gender pay gap stands at 14.9% while our median gap is 10.8%.
You can see the full report of our gender pay gap here.
While employers are under no obligation to report early, we would encourage those that are able to do so. We believe that those employers that publish early will be able to stand out from the crowd, which will send a strong message to their stakeholders that the organisation considers this an important issue, as well as being able to highlight the actions that they’re going to take to tackle any substantial gap.
Some of these actions may be dealing with internal issues, such as flexible working opportunities for individuals returning from child or elder care. Others may be dealing with external issues, such as challenging career perceptions by giving talks at local schools.
Charles Cotton, Research and Policy Adviser, Performance and Reward
Charles has recently led research into the business case for pensions, how front line managers make and communicate reward decisions, and managing reward risks, as well as the creation of a good practice guide on the annual pay review process. He is also responsible for the CIPD’s public policy work in the area of reward and is a Chartered Fellow of the CIPD.
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