New gender pay gap legislation: How your business can minimise risk

By 26th September 2016 News No Comments

Worried about the new gender pay gap legislations?

With companies employing over 250 staff members needing to report their gender pay gap by April 2018, more than 8,000 businesses across the country might currently be unprepared to meet their statutory duties.

Here’s our guide to what your company can do to prepare for the change:

 

Where are we now?

Although, under the Equal Pay Act, it is illegal to pay different amounts to men and women doing the same jobs, ONS figures suggest that female employees in the UK still earn, on average, 20% less than men.

Whilst this is the lowest since records began, it is emblematic of continued inequality in the workplace – one reason why new legislation was put in place to ensure companies are honest about, and publish, their pay gap.

 

Why are the changes being made?

It all comes down to a greater sense of transparency.

By revealing the number of men and women in each pay range, it will be clear to see where pay gaps are at their widest – giving gender inequality nowhere to hide and forcing companies to acknowledge, address, and explain any pay gaps that exist in their organisation.

Nicky Morgan, the former Equalities Minister and Education Secretary, explained: “In recent years, we’ve seen the best employers make ground-breaking strides in tackling gender inequality. But the job won’t be complete until we see the talents of women and men recognised equally and fairly in every workplace.”

It is also hoped that this system of reporting will help to identify broader issues of gender inequality through progression and promotion across the workplace, and provide a measure of female progression.

 

What are the major benefits?

Aside from transparency, the new legislation will allow businesses to talk confidently about their approach to pay – something which could help change perceptions in traditionally male-orientated industries, such as engineering and finance. As a result, it has the potential to attract more talent to your company.

One of the major benefits is in addressing the unconscious bias that exists in boardrooms across the country. Although most companies don’t choose to discriminate, the gender pay gap has never properly been addressed at the highest levels.

The new legislation will allow HR teams to finally address this complex and long-standing issue.

 

A wider education piece

Enforcing the new changes is not a straightforward process.

First of all, the reports need to be signed off and fully understood by a senior member of staff. Something which takes it far beyond the realms of HR.

Depending on your organisation, part-time working, temporary contracts, bonuses, and other demographics will need to be taken into account.

In effect, it’s not just a change, but something bigger than that. We all need to be gender pay experts to implement the changes correctly.

 

Is your business ready?

Although the first tables won’t be published until April 2018, UK businesses will need to start calculating their pay gap at least 12 months earlier.

If there are currently disparities within your own business, that means there’s just over six months left to address them, before you need to start tracking.

Any gaps that exist after this point won’t be able to be ignored – and could lead to irreparable damage to your brand.

 

How can we minimise risk?

If you’re worried about how the new legislation could affect your company, here are a few key steps to help minimise risk:

  • Step one: find out what information you need to complete the analysis
  • Step two: determine how easy it is for you to capture the information required (information may be kept on different systems, or might be hard to manipulate)
  • Step three: have a trial run. What is your data telling you? What does this mean for your organisation?
  • Step four: talk to your senior management team. Make sure they know the timetable, the expectations and the outputs of your data analysis
  • Step five: agree a plan forward – to address any gaps, and to publish your data

Still have some concerns about the new gender pay gap legislations? Let us know in the comments below.

 

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