The second wave in Gender Pay Gap reporting

Billed as the greatest legislative game-changer since the Equal Pay Act, employers with 250 or more employees will now be preparing for their second phase of gender pay gap reporting.

The picture so far

Figures from the Confederation of British Industry show that 93% of businesses are taking action to close the gender pay gap and attempting to increase diversity in their workforces, compared with 62% who were asked a similar question in 2017.

To mark the second phase of gender pay gap reporting, the Equality and Human Rights Commission (EHRC) published its report ‘Closing the gender pay gap’ on 14 December 2018, analysing the approach taken by employers to compiling and reporting on their gender pay gap figures.

Following the EHRC’s report, companies will now be urged to provide a contextual narrative, which gives them valuable opportunity to explain the reasons for the gap and their intended action plan. The report also makes the point that any action plan should set out targets and timescales on best practice, rather than publishing generic statements that lack real thought or transparency in terms of how companies aim to manage and improve upon their gender pay gap.

The future – a more inclusive workplace?

Although it sounds obvious, as gender pay gap reporting is an annual requirement with each year that passes the expectation of companies will grow to show improvement in their statistics year on year, meaning that the challenge of managing expectations will become much more important.

This kind of mandatory reporting has seen an increase in support from the government for similar transparency initiatives, leading to proposals for mandatory ethnicity pay gap reporting but also voluntary reporting on disability, mental health and wellbeing. At the tail end of 2018, the government introduced a framework to support employers to report information on the number of employees they employ who consider themselves to have a disability or mental health issues and what they are doing to provide a more inclusive workplace.

What are the benefits of greater transparency?

Together with the mandatory gender pay gap reporting requirements, this framework should allow employers to:

  • improve employee engagement and retention
  • improve productivity and performance
  • access a wider talent pool that may previously have been overlooked.