Gender pay gap reporting
12 April 2018
This article was featured in the May 2018 issue of the magazine.
Diana Bruce MCIPPdip, CIPP senior policy liaison officer, reviews the first year through the lens of the payroll industry
What gets measured gets managed…what gets publicly reported, gets managed even better” is a phrase that caught my attention and summed up perfectly the reasoning behind the need to mandate gender pay gap (GPG) reporting.
The suggestion for the CIPP policy team to carry out further research into the experience of GPG reporting came from our membership as a suggested subject for a roundtable meeting during 2018. In large part this was to enable members who were thinking of voluntarily reporting their GPG results – due to their falling below the 250-head-count size for mandation – to come together with members from larger employers to share experiences and to learn from one another. The perfect outcome to a roundtable.
...overwhelming support that our members had for the policy of GPG reporting and all the wider policy implications...
The idea for the white paper – Gender Pay Gap Reporting – The first year through the lens of the payroll industry (https://bit.ly/2EggJaw) – evolved from that initial suggestion. So, the authors of that paper – myself and my colleague Samantha Mann, MAAT, MCIPPDip CIPP senior policy and research officer – express our gratitude to member Kim Tupman MCIPPDip, compensation and benefits manager of the human resources department at Mitsubishi Corporation International (Europe) Plc, for making the suggestion and providing such a wonderful meeting room for us to hold the roundtable gathering.
Our thanks go also to the members who attended that meeting. Too many to mention in this short article, but they know who they are. Their contributions were invaluable for our research.
When we began our research in to how differently the payroll sector had approached the mandation of GPG reporting for the first year, I thought the focus would be on the problems and challenges of turning the raw information within payroll in to manageable data to be used as a basis for calculations. There were many issues raised but the overwhelming support that our members had for the policy of GPG reporting and all the wider policy implications shone through.
Key points
The payroll profession spans many disciplines and we sought to hear the views from as many representatives as possible, such as software developers and in-house and out-source providers. Further, because we had highlighted education and guidance as areas of exploration it was important to consider the source of information from technical writers and professionals working in training and education.
Keys areas of interest included: software support; previous experience with GPG reporting; communications; guidance; education; the all-important implications of failing to comply – what would the consequences be; and, of course, what lessons had been learned that would benefit the stakeholder experience going forward.
Software developers were important to the immediate communications piece but as we would expect, payroll professionals proved to be the key element within the process, with human resources (HR) coming in a close second. From the outset of the policy development for GPG reporting buy-in from senior management was essential.
Lessons learned would see much earlier preparation in the second year, and there is increasing expectation that technology will deliver what it was unable to deliver in all cases for the first year of reporting.
The European Union referendum held in 2016 was identified as the main culprit for the delay in finalising regulations and in providing finalised non-statutory guidance. The impact of Brexit hit early with this and many other government policies that impact payroll as it caused havoc to the parliamentary timetable.
However, much work has been done this year to retrieve the correct data so many are feeling confident that the next GPG reports will be less labour intensive. Nevertheless, 47% of survey respondents said they would do something differently in the second year of reporting.
Numbers of employers uploading their results to the GPG reporting service continue to increase slowly. The scanning of published reports reveals how diverse companies are when it comes to displaying their data, written statements and narratives, and also what action companies are taking to address gender imbalance and reduce their gender pay gaps.
Throughout our research the total commitment and engagement of members of the profession and more widely across all sectors, to this policy and to the mandation of GPG reporting, has shone through. This can be demonstrated through the GPG viewing service and across all sectors where there are many good examples that can be found of employers taking action to implement measures needed to reduce gender pay gaps.
The inclusion of research findings that had previously gathered views about the proposed measures that the Equality and Human Rights Commission (EHRC) intend to take to enforce GPG reporting revealed there is agreement that it is reasonable to prioritise enforcement action for failure to publish information in the first year. The proposal for an escalating response to be taken by EHRC appears to be sensible. However, the CIPP continues to call for a ‘light touch’ approach to be taken for year one, in recognition of the impact that delayed regulations and guidance has had on employer and industry preparation.
We need to see the Government Equalities Office along with the EHRC reclaim the headlines. Confusion abounds around the difference between equal pay and gender pay gaps. This is not helped by the media sensationalising their headlines.
The Secretary of State will review, within five years of commencement, the GPG regulations and publish a report on whether they meet policy objectives or impose an unnecessary burden. There have already been many calls for a review of the elements of pay and reward that can be included within the average hourly rate. Significant concerns continue to be raised by the potentially misleading results caused due to the exclusion of the value of salary sacrifice amounts.
Regulations need to be finessed to match non-statutory guidance: where the average hourly rate will distort the results and the hourly rate is clearly known during the snapshot period. The guidance would benefit from the inclusion of more examples.
Many factors will need to change to achieve full transparency, diversity and inclusion. However, the research revealed that all sectors within the payroll profession have, as they do with all new mandatory requirements, engaged wholeheartedly to ensure successful delivery of GPG reporting.
payroll profession...engaged wholeheartedly to ensure successful delivery of GPG reporting...
And, finally…
No research would have been complete without survey findings and at this point I would like to end with a final thank you to all members of the CIPP and the profession more widely who took time out of their busy working days to complete this survey (and so many others throughout the year).
Your support is invaluable in providing us with your views and opinions. We know how busy you all are and so are always grateful for your commitment to this and other policy research work.
Regarding gender pay gap reporting in year two, I think it is safe to predict that in terms of research ‘we will be back’.