Gender pay gap reporting must look beyond the numbers, urges the CIPD

Greater transparency will shine a light on the factors contributing to the global gender pay gap and help identify what can be done to close it

New regulatory requirements coming into force this month mean that HR teams across the UK should be taking a snapshot of their payroll data to identify differences in male and female earnings, according to six different measures.

The CIPD has published detailed guidance to help employers in the UK comply with the new reporting requirements, but is also calling on organisations all over the world to go over and above what’s required by publishing a transparent narrative about the factors contributing to their gender pay gap and what they’re doing to address it.

Peter Cheese, the CIPD’s Chief Executive, said in his introduction to the latest issue of People Management magazine, that being transparent about the reasons for any gender pay gaps is the key to closing those gaps over time. The CIPD has published its own gender pay gap in its annual report since 2015, and has pledged to publish a more detailed narrative about the reasons for the gap, and how it plans to address them, in this year’s report. The professional body is encouraging other organisations to do the same, whether the new requirements apply to them or not.

What you need to know

  • Gender pay gap reporting is not about unequal pay. Women in the UK have had the legal right to equal pay since the 1970s, but their average earnings are still 18.1% less than men’s, due to the nature of jobs men and women tend to do and various factors that can put women at a disadvantage when it comes to progressing in the labour market.
  • The new reporting requirements apply to organisations with 250 or more employees. If you don’t yet employ 250 people but are likely to in the foreseeable future, you can still report voluntarily.
  • Public sector organisations must base their analysis on payroll data from 31 March and those in the private and voluntary sectors must take their snapshot on 5 April. In Scotland, public bodies with 20 employees or more must publish their ratios.
  • Organisations must measure their gender pay gap in up to six different ways:
    • Mean gender pay gap: the difference between the mean hourly rate of pay of male full-pay relevant employees and that of female full-pay relevant employees.
    • Median gender pay gap: the difference between the median hourly rate of pay of male full-pay employees and that of female full-pay relevant employees.
    • Mean bonus gap: the difference between the mean bonus pay paid to male relevant employees and that paid to female relevant employees.
    • Median bonus gap: the difference between the median bonus pay paid to male relevant employees and that paid to female relevant employees.
    • Bonus proportions: the proportions of male and female relevant employees who were paid bonus pay during the relevant period.
    • Quartile pay bands: the proportions of male and female full-pay relevant employees in the lower, lower middle, upper middle and upper quartile pay bands.

What you need to do

  • Read the CIPD’s guidance for more information on how to calculate these figures and what your calculations need to take into account.
  • Then talk to your payroll software provider to see how much of this analysis they can do for you. Larger organisations should consider creating a team with the right skills to analyse and communicate the findings.
  • When publishing your figures, provide a short explanatory note, or narrative, to set your pay gap figures into context and highlight any action you’ve taken or plan to take to close any significant gaps. This is not compulsory but will reduce the reputational risks around publishing your gender pay gap and will contribute to painting a bigger picture about the factors contributing to the UK’s gender pay gap.
  • Gender pay information must be published on your own website, as well as on a dedicated government website (currently under development). The deadline for publishing gender pay gap information is 30 March 2018 for public sector organisations, and 4 April 2018 for those in the private and voluntary sectors. All organisations must then report new data every year thereafter. If your headcount drops below 250 in any given year, you are encouraged to continue publishing gender pay gap information on a voluntary basis.
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