HR professionals divided over impact of pay gap reporting on gender equality

PM survey also suggests employers will need to significantly rethink pay and reward discussions

Nearly half (47 per cent) of HR professionals believe the new gender pay gap reporting requirements will make ‘little difference’ to improving gender equality at work.

People Management’s survey comes ahead of the introduction of regulations on 6 April that will require private sector companies with 250 or more employees to collect data on the difference between average male and female salaries, and to publish that data within the next 12 months.

Although almost three-quarters (73 per cent) of the 201 HR professionals working in organisations with more than 250 employees said they expected their company to be able to meet the reporting deadline of April 2017, only a third (36 per cent) said they felt their organisation understood the government requirements. Nearly half (47 per cent) said their company did not fully understand the regulations.

“I joined the company last week,” said one director of people and culture. “They have done nothing about it. Not sure they even knew about it. I’ve got until April to sort it out.”

The burden of producing and collating the data has fallen squarely on HR, found the survey; 85 per cent of HR professionals said their department was responsible for ensuring their company complied with the requirements.

Although HR should, in theory, be most keenly aware of the gender pay gap within their organisations, nearly a third (29 per cent) of those surveyed said they didn’t know what the results might show for their company. The majority of respondents (61 per cent) said they expected there to be a pay gap in favour of men in their organisation; only 9 per cent said they expected women’s pay to be higher. The Office for National Statistics estimates the current overall UK pay gap to be 18.1 per cent in favour of men.

While the data doesn’t have to be publicly released before April 2018, HR should brace itself for the impact now, said Charles Cotton, performance and reward adviser at the CIPD: “Companies need to get on the front foot, as publishing the figure may lead to a lot of questions. Explain what you are doing to attract more women, and how you’re addressing any gaps at particular grades.”

Sheila Wild, founder of the Equal Pay Portal, added: “You don’t want your employees to find out [the results] from the local press, who’ve got the information from the government website.”

Providing reports on gender pay gaps is likely to affect a number of key areas of HR, including reward and pay discussions (cited by 62 per cent), employee morale (45 per cent), employer brand (38 per cent) and the ability to recruit (20 per cent).

HR professionals are also expecting to have to make strategic changes as a consequence of the report’s results, most significantly to communications around reward and pay (cited by 64 per cent of respondents), altering the talent pipeline (28 per cent), raising pay for women (27 per cent), promoting more women (26 per cent), making flexible working more widely available (26 per cent) and hiring more women (20 per cent).

A number of survey respondents expressed concerns about the validity and relevance of the data due to be collected. One HR professional, who has recently completed an HRM master’s degree that included a dissertation about the underrepresenation of women at senior levels, said: “While it’s encouraging that this reporting will come into place, the figures are somewhat superficial and do not get to the root cause of female underrepresentation at senior levels. Nor do the figures prompt organisations to tackle this issue. I fear that it will encourage organisations to defend their gap and justify it rather than look to the causes (such as culture) that contribute to it.”

An HR manager in the medical sector expressed concern about the limited about of time organisations have had to prepare: “[I’m] very frustrated at the ‘rush job’ from final regulations being published in late December to need to report on 5 April. Plus [it] creates a significant admin burden.”

Others were worried about HR’s ability to shift the dial on gender pay equality in the longer term. A global reward director in the technology sector commented: “80 per cent of our jobs require an electronics engineering degree and our pay gap has structural reasons that are rooted in the UK education system. The reason for our pay gap is the systemic underrepresentation and self- or teacher/parent-induced de-selection of STEM subjects by teenage girls. This leads to girls not having the prerequisites to take STEM subject courses in further and higher education, and to the very poor ratio of women studying engineering subjects at university in the UK compared to other countries.”

Source – Written by Cathryn Newbery, as featured in People Management – http://www2.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2017/01/27/half-of-hr-professionals-expect-pay-gap-reporting-to-make-little-difference-to-gender-equality.aspx

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