The past few weeks have seen PR disasters, shocking revelations and great strides towards closing the gender pay gap as British companies were forced to reveal their wage disparities.
All companies in England, Scotland and Wales with more than 250 employees, as well as some public sector bodies, had to report their gender pay gap to the Government Equalities Office by 4 April.
With over 10,000 companies filing their pay gaps by the deadline, there has been plenty of scope for analysis, controversy and news stories.
Data from the Office of National Statistics shows that the gender pay gap actually increased from 18.2% to 18.4% between 2016 and 2017, though the general trend has been a gradual drop since the millennium. This month, the finance and construction industries reported the biggest gender discrepancies, with median pay gaps of 22.1%.
Impact on HR industry
This month’s events have clear ramifications for the HR industry and all businesses in the UK.
It is clear that gender pay gaps will no longer be tolerated; companies who were revealed to have the most drastic gender pay gaps, such as Ryanair, who had a gender pay gap of 72% and JP Morgan, whose median gender pay gap was 54%, have been the subject of a great deal of negative publicity.
However, as Duncan Brown, head of HR consultancy at the Institute for Employment Studies told People Management last week, businesses who reported large pay gaps will also have to face internal anger and staff morale issues, as employees may not have been aware there was a gender imbalance at their company.
“It’s important for organisations to consider what they will say to their own staff, instead of just thinking externally,” he pointed out.
In addition to bad publicity both externally and internally, gender pay gaps could dissuade prospective employees from joining a company, resulting in businesses missing out on talent and the potential loss of skills in their workforce.
The data revealed from this month’s reporting could well become part of the background checks performed by job applicants when researching a company.
The emphasis, then, is on companies to rectify the pay gaps they have been forced to admit to this month – and with the issue very much already in the public spotlight, the pressure is on to find solutions quickly.
It seems very likely that many companies across the UK will now be reviewing their pay structures to ensure men and women performing the same roles are paid equally.
Impact on future pay gap reporting
As some in the HR industry have pointed out, while powerful and much-needed, this month’s pay gap reporting still hasn’t fully held businesses to account. There have been reports of businesses submitting inaccurate figures for the 4 April deadline as more of a box-ticking exercise than a show of transparency – with some businesses simply entering salaries as a string of zeros instead of the actual amounts.
Some critics have also rightly noted that without context the pay gap figures can be misleading. For example, it’s not clear whether the figures reported take into account experience, hours worked and qualifications, which could be legitimate reasons for pay discrepancies.
Therefore it seems likely that future deadlines will force businesses to be even more transparent about their pay practices, including some context behind the figures.
What is clear is that this is a ‘ground zero’ point for the issue – it won’t be going away any time soon.