Gender Pay Reporting: Should you really be marking your own homework?
Sometimes I hear ‘why pay for a service that I can do myself?’ It makes logical sense to save money and take activities in-house, but sometimes, especially when it’s a regulated activity, should you really mark your own homework?
On the surface it may seem like an additional expense, but in reality a consultancy provides you with a proven and tested service following the regulation guidelines. Using an external body indicates to your workforce that you are taking this seriously, that you are bringing in an expert team to review your position, and that you are open and transparent.
Clean, complete, and accurate data is key and is of the utmost importance, and we resolve questions that may cause confusion: Which employees are in scope according to the regulations? Should you include casual workers, and are all casual workers really casual? We have international workers employed in the UK, and we have UK workers employed abroad, should we include them? How are different business entities reported?
Having that human element is important - we don’t just run your data through a calculator. If you put rubbish in, you get rubbish out. Not only do we thoroughly review and validate the employee data for you, but we also handle all those tricky questions:
- Leavers in the pay reference period: are they on a reduced rate of pay, and are termination payments included?
- New starters in the pay reference period: when did they start, are any pay gaps due to service eligibility criteria?
- What happens if someone’s hours change during the pay reference period?
- What happens if someone leaves during the pay reference period?
All these circumstances need to be evaluated and the right decision made according to the regulations.
Let’s not forget COVID has brought its own unique twist for gender pay reporting, so how should you report furloughed staff? Clear guidance is needed to understand whether to include or exclude furloughed staff – furlough doesn’t always mean exclude. Have you considered what your gender pay gap might have looked like without any COVID impact? We have run such scenarios for a number of clients which indicate that the pay gap change (usually an increase) is potentially an anomaly caused by furloughed employees and changes due to COVID, and these have been highly effective in RemCo and Board reports to accompany the gender pay report providing reassurance that changes to the gender pay gap are understood and can be explained.
Yet, post the immediate pandemic and the world carrying on, the landscape is changing with some companies expanding and/or acquiring other organisations (or planning to do so) therefore pushing headcount above the magic 250. Companies who wish to be ahead of the curve and review any gender pay gap ahead of any expansion or acquisition/merger tend to a carry out a ‘dry run’ to understand the gender pay gap ahead of the actual publication. This has many benefits:
- demonstrates commitment to understanding any pay gap
- gives an opportunity to improve the data ahead of the snapshot date (5th April) when the data is captured for the calculation
- offers the opportunity to see where the issue(s) lie with the opportunity to start to resolve
Casting the right lens over your data to uncover your gender pay gap will help you to understand what actions you can take to close the pay gap. If an organisation has a pay gap in favour of men, the assumption is to employ more women at the top of the organisation. This may seem logical, but you need to understand the gender distribution across your organisation as this may not be the solution. If an organisation has three-quarters of its female workforce in the bottom half of the organisation, even employing a large number of females at the top won’t drastically close the gender pay gap. It may sound counter-intuitive, but often to close a gap in this situation requires men to be employed, but in the bottom half of the organisation. A consultancy can help you to understand why the gap exists and can support you if you choose to make changes.
Time is of the essence even with the delayed publishing of the 2020/21 gender pay gap to the 5th October 2021. Whilst this has given organisations more time to catch up, the publication of the 2021/22 reporting year is required by the end of the 4th April 2022 (in just over 8 months’ time) using the data captured on the snapshot date 5th April 2021 – as this date has past, changes made now will not change this pay gap. The reporting year 2022/23 is where any changes you make now could make a difference – this will be the data captured on the 5th April 2022 (also in eight months’ time), so with the 2021/22 pay gap to report, and the 2022/23 reporting year to prepare for, our services can help you get ahead.
If you would like to discuss your gender pay reporting requirements in more detail, please do get in touch - you can reach me by email (email@example.com), or call our consultancy team on 020 3457 0894. You can also download our Gender Pay Reporting Brochure here.