Article by: Chris Charman | Published: 31 August 2017
UK companies committed to gender pay gap reporting but need to explain slows publication. A third of companies have completed reporting, few have published yet. The majority (70 percent) intend to publish a narrative to support the figures. Over half (54 percent) have looked into root causes, albeit focusing on pay levels rather than long term issues such as women’s careers. Comment Chris Charman, Principal and Reward expert at Mercer.
Although supportive of Gender Pay Gap reporting in principle, the majority of UK companies see the need to create a narrative around their figures which is slowing down publication, according to a recent survey by Mercer. The survey shows that although perceptions of the regulations have improved since being made final, companies find the regulations complex (41 percent), confusing (29 percent) and misleading (28 percent) – see table 1. A third of companies had completed their analysis at the end of May and most (44 percent) plan on leaving it to later in the year (Oct 2017-Jan 2018) to report; 28 percent don’t know when they will report.
“Although committed to the principle of reporting many UK companies feel the figures will show an overly simplistic view and so see a need to explain further to their staff and shareholders”, said Chris Charman, Principal and Reward expert at Mercer. “Many companies are concerned about the risk of reputational damage when publishing their figures, especially as there still seems to be much confusion between the Gender Pay Gap and the legal requirement of equal pay for equal work.
“Most organisations are focused on getting to grips with the figures and developing a narrative to explain. Leading organisations are well advised to think about how they can be looking ahead in order to be making improvements in future years. At the heart of this is looking at root causes, which can be found in pay, female promotion and the jobs that men and women predominate in.”
In terms of looking for root causes of the pay gaps, 54 percent of respondents have conducted some sort of analysis (e.g. equal pay audits and bonus programme analysis) in the last three years. Looking ahead there is a dramatic change in the attention being given by organisations to actions beyond pay, and some leading organisations are addressing this issue already. For example, 25 percent of organisations have analysed data on female promotions already with a further 30 percent intending to do this; 25 percent have set goals for female representation with a further 19 percent intending to do this; 36 percent have already trained managers in unconscious bias with a further 20 percent intending to do this.
“Those companies who focus solely on compliance will have a hard time closing the gap,” said Mr Charman. “From our own research we see that to make progress on closing the Gender Pay Gap requires fair pay programmes, equal pay monitoring and corrective action, a strong focus on female progression and gender parity, as well as attention to the broader diversity and inclusion programme.”
Mercer’s Gender Pay Gap Reporting Survey provides insights from HR and reward professionals on their perceptions, reactions, concerns and plans surrounding the legislation. Mercer received responses from 165 UK companies, of which 29 percent were from the FTSE250, representing a market capitalisation of more than £449bn.