Gender pay gap reporting: Where are we now? [Guest Blog]

Anthony Horrigan, CEO of Staffmetrix, gives an update on the progress of gender pay gap reporting in the UK.

Gender pay gap reporting became a legal requirement for private and public sector employees with more than 250 employees in February 2017. With a snapshot date of 5 April, companies have until 4 April 2018 to submit their reports to the government.

As at Monday 4 December 2017, 300 employers had reported giving an overall average gender pay gap of 13.1% on a mean basis, or 12.7% on a median basis. The highest gender pay gap to have been reported by sector is financial services with 28% and 29% on a mean and median basis.

So far only eight financial services companies have reported, and based on our experience there are a number of reasons.

Organisations are finding that collating data is harder and takes longer than thought. In most cases, it is likely that data is sourced from multiple different systems. The data is then extracted, cleaned and transformed to ensure all data is in the same dimension or format. This process includes deciding which employees to include, and how certain aspects of more complex benefits packages should be treated.

Once the data is analysed, it may highlight a few issues that require legal consultation. We understand a number of financial services organisations are concerned by potential equal pay claims. While gender pay gap reporting and equal pay are separate issues, the analysis required for gender pay reporting is highlighting pay disparity at an individual employee level.

We saw the implications earlier this year when Financial Times journalists threatened to strike following an email from union leaders saying there was an increasing sense managers at the organisation “have not been taking this matter seriously enough” and that the lack of transparency about pay for executives at the newspaper “did not inspire confidence”.

At the end of October this year, it was reported that 10 senior women from the BBC are consulting lawyers about its gender pay gap and could take legal action if the broadcaster fails to address the issue. Legal action could potentially take place through an employment tribunal on sex discrimination or a high court case.

These examples highlight the risks employers face and perhaps explains why financial services companies are being cautious. However, our view is that if organisations demonstrate credible and meaningful steps towards change, a less positive back story can be turned into a positive future one.

For asset managers, the issues of gender pay gap reporting and diversity and inclusion are gaining traction as part of the investor selection process. A report from thinktank New Financial titled ‘Diversity from an investor’s perspective’ discovered that diversity is moving up the agenda of asset owners (pension funds, investment consultants and sovereign wealth funds).

According to the report, diversity is beginning to influence manager selection with more questions being asked in requests for proposals. However, easy access to real-time data remains an issue for asset managers and investment consultants.

There is now a growing number of reasons why financial services companies must take diversity more seriously and consider how they establish more balanced workplaces by being more transparent and implementing policies that provide all employees with the opportunity fulfil their potential. Change will take time, but a concerted effort where progress is measured must be made.

Each month Staffmetrix produce a Gender Pay Gap Pulse Report which provides an update on gender pay gap reporting progress. You can find a copy here: Gender Pay Gap Pulse Report

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