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Article:

How could Gender Pay Reporting affect your business?

16 January 2018

Publishing gender pay gap figures could have significant impact on your business sector and company, both in terms of your employee relations and your interaction with other stakeholders.

Taking time to analyse why a gap exists, how best to communicate this to both employees and the wider public and how to address the situation should be the focus of your process. A short term response to GPR may be to alter the mix of pay between men and women. A more significant result will be to address the root causes leading to a better balance of progression for men and women.

Resources, time and costs

We recommend that you form a GPR working group, which includes relevant third parties. They need to form a plan to meet the GPR deadline and decide what resources are needed.

The GPR process will probably be complex and absorb internal resources. It is, therefore, important to plan ahead, particularly on timing and obtain support of senior leadership. It is likely that your focus will initially be data analysis. However, the medium and long term focus should be on how to address any gender pay gap.

You should not underestimate the resources needed for the annual GPR cycle. Given the sensitivity of the data and reputational risk, you should involve senior staff plus representatives from payroll, HR and reward. Many organisations will want to outsource at least part of the work and obtain professional advice.

If you outsource the work, then handling data safely and security are key. BDO is a leading outsource provider for both UK and global companies, handling large amounts of confidential data securely and efficiently through portal technology.

Data handling

Data handling will be complex, the number crunching may well involve tens of thousands of lines of data. We have set out a suggested data shopping list in section 7. The detailed calculations are complex and many employers may be surprised by the time taken to prepare the first set of numbers.

Narrative

You should take the opportunity to provide a narrative or commentary to the reported figures on your public website to explain them, highlight trends and describe proposed changes in policy. Addressing a gender pay gap is unlikely to be easy or a ‘quick win’. The narrative should, therefore, be carefully drafted with support of senior leadership and not left to the last minute.

Reputational risk

Many employers will have a gender pay gap (and that can work both ways). As discussed above, there may be many reasons for the figures and many relate to fundamental issues around motherhood and child rearing.

GPR will allow you to identify areas of concern and then communicate to employees, customers and other stakeholders how you intend to address them over the coming years. The recent adverse publicity around the BBC and gender pay has highlighted the issues and risks.

Recruitment and retention

An employer’s position on equality, diversity and inclusion is increasingly important when talent is deciding whether to consider employment and developing a career.

There is a growing focus on gender pay gaps, transparency and social media campaigns. Peer review websites such as Glassdoor and campaigns such as the 30% club (aiming for 30% of FTSE 100 executives to be women) mean that employers are potentially exposed to reputational damage and possibly equal pay litigation relating to gender pay gap issues.

Clients and suppliers

Consumers and businesses are increasingly focused on ethical behaviours. The publication of gender pay gap information will lead to a greater focus on this area, possibly leading to adverse publicity and loss of revenue.

Other stakeholders

Investors have become increasingly focused on executive pay within organisations. The publication of gender pay gap information may affect investment decisions so employers will need to focus on clear communications with investors to explain how any gender pay gaps will be addressed.

This is just the start

GPR is new but will soon be embedded in our culture. GPR focuses on the performance of individual employers but it is clear that business, society and Government need to act together. It is possible that GPR will be extended to smaller businesses, for example those with 100 employees or more and its scope could also expand to cover areas such as ethnicity and the ratio of CEO pay to average pay.

Further resources: upcoming webinar, a published guide and Gender Pay Reporter

Webinar: On 7th February we are running a GPR webinar where we will look at what information needs collecting, the calculations to be undertaken and published in respect of pay and bonus figures and how a gender pay gap could affect your business.   

Guide: BDO’s Gender Pay Reporting guide covers in depth the reporting requirements for impacted businesses. Our guide offers example calculations, an action plan, a data shopping list, a glossary and frequently asked questions. 

BDO can help you in all aspects of the GPR process to suit you and your resource gaps. At the centre of our offering is a tried and tested portal which acts as a project management tool and secure means to share highly sensitive data.