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How are companies reporting on the gender pay gap?

Gender pay gap (GPG) reporting is the Government’s headline initiative to drive increased transparency and tackle the gender pay gap in the UK. 9,000 companies with 250 or more UK employees are required to have disclosed specific pay gap figures between female and male workers by 4th April 2018. The required information includes:

  • Mean and median gender pay gap
  • Mean and median bonus gender pay gap 
  • Proportion of males and females receiving a bonus
  • Proportion of males and females in each quartile pay band 

Companies must publish the above statutory information annually on both a government website and their own corporate website, alongside a written statement from an appropriate senior person confirming the accuracy of the figures. With just 7 weeks left until the deadline, only 15 companies in FTSE have published their gender pay gap data on their websites as of 7th February 2018.

What will be the impact on companies?

In the first instance, companies will need to ensure that they are prepared for the new disclosure requirements and are clear about what data they need to collect. Whilst there is no legal requirement to publish an individual report on gender pay and related issues, a large number of companies are choosing to do so. We are seeing that many of these reports are providing narrative to put the statutory figures into context. This approach creates a transparent way of communicating with your stakeholders and gives an opportunity to tell ‘a more complete story’ around your diversity policies.

Key research findings

In our previous blog post on gender pay gap, we analysed how FTSE 100 companies have discussed the issue in their annual reports. Our new research looks at a selection of ten FTSE 100 firms who have already published separate gender pay gap reports. Our aim was to identify emerging trends among the early adopters. 

  • All companies surveyed offer broader perspectives on their gender pay gap issues beyond basic compliance with the requirements

While the regulations only require companies to disclose the prescribed gender pay gap calculations and include a statement from a senior person confirming these figures, companies went the extra mile to leverage the information collected to provide an insightful narrative.

  • All companies assessed drew a clear distinction between equal pay and the gender pay gap

The companies observed make a clear distinction between these interlinked issues at the beginning of their reports, and almost all of them clearly outline a commitment to equal wages for females and males doing equal work (see easyJet’s report). They also indicate that the gap in their organisations partly results from having fewer women in senior positions.

  • All companies surveyed provide an explanation for the existing pay gap in their company

For example, companies in traditionally male-dominated sectors – technology, energy and manufacturing in particular - identify the wider issues of fewer women in the fields of STEM, engineering and technology (see Sage’s report).

  • 90% of companies observed include a narrative on diversity and on specific initiatives to further a diverse pipeline

In general, forward-looking reports detail the steps to tackle the issues related to the gender pay gap.  For example, Shell’s report outlines the company’s investment in STEM programmes as a long-term measure to increase female workers in the sector. Aviva was one of the 70% who describe retention programs, discussing flexible working and a new parental leave policy to close the gender pay gap. As we noted in our previous blog, some leading companies are already doing this in their annual reports. For instance, easyJet’s 2016 annual report includes discussion of the schemes the company participates in to increase the number of female pilots.

Things to think about

From our experience of working with companies, regulation often helps to start a conversation internally about an issue, but specific developments need to be viewed in the larger context or they become merely tick box exercises. Discussions need to explain the business rationale for diversity and gender pay issues and how all these initiatives together can move the dial on diversity. All this feeds in to the broader discussion around corporate culture and is, ultimately, all about making companies better run, management teams better at making decisions and Boards capable of delivering better performance. So when thinking about your communications think about these things:

  • Referring to the business advantages of bridging the gender pay gap
  • Including case studies to highlight key initiatives and to demonstrate progress
  • Demonstrating clear ownership of the issue by senior management

Our integrated team of reporting, communications and reputation experts can help with communicating your gender pay gap story through your annual report, website, or a separate report, as well as to your internal audiences.

If you need some help, please get in touch with us by contacting Sarah Myles.