Experts warn employers must not ‘put off reporting to the last minute’

Organisations are dragging their heels on gender pay gap reporting because they find the process complex, confusing and misleading, new research has found.

Companies with 250 or more employees have until next April to collect and publish data on the difference between average male and female salaries. However, since the legislation was introduced this April, just 62 companies have published their gender pay data.

A study by Mercer of 165 companies revealed two out of five (41 per cent) found the process complex; 29 per cent thought it was confusing; and 28 per cent found the rules misleading. Just 7 per cent described the process as comprehensive and only 3 per cent said it was simple.

Of the businesses surveyed, almost half (44 per cent) plan on reporting later in the year, while 28 per cent said they do not know when they will report.

“Employers shouldn’t be tempted to put off reporting to the last moment,” said Charles Cotton, senior performance and reward manager at the CIPD. “If they haven’t already started, they need to think about how they communicate to employees, potential workers, existing customers and other stakeholders, what the figures mean, and what action they are going to take and why.”

Mercer also found 70 per cent of surveyed organisations intended to release a narrative explaining their gender pay figures along with the hard data.

“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.”

The negative backlash that can hit companies that fail to justify the differences in male and female pay was illustrated in July, when the BBC’s gender pay gap filled column inches. When the broadcaster unveiled the salaries of its on-air talent who earn more than £150,000, it also revealed many of its highest-paid male stars were being paid significantly more than their female counterparts for doing what appear to be the same job. 

According to Mercer, over half (54 per cent) of companies have carried out some sort of analysis into the root causes of their gender pay gaps, with 25 per cent of organisations analysing data on female promotions, 25 per cent setting goals for female representation, and 36 per cent training managers in unconscious bias.

“Gender pay gap reporting is not just about reporting the right figures, at the right time and in the right way,” Cotton said. “It’s also an opportunity to explore why the gap exists and at the practical steps that can be taken to reduce it, as well as creating a compelling narrative for employees and other stakeholders about what employers are doing and how.”

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