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Rubbish in, Rubbish Out – Making Sure your Gender and Ethnicity Pay Data is Accurate

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Posted by Sarah Nash on 06 July 2020

Rubbish in, Rubbish Out – Making Sure your Gender and Ethnicity Pay Data is Accurate

Gender Pay | Gender Pay Gap | Gender Pay Reporting

There is so much more to pay gaps than publishing the numbers and being seen to comply with the regulations.  It is so much more than a box-ticking exercise just to say that it has been done.  The work that we do at Innecto often uncovers more questions than it answers, and it’s actually more important to understand the data behind the gap, the reasons it exists, and your actions to close the gap than just publishing the gap by itself.  

Saying very little about any pay gap speaks volumes and implies to readers that it is not a priority. Top talent dissuaded from applying for jobs with you; existing employees feeling under-valued and resign; the media reporting unfavourably damaging your reputation and an employer. This is not the sort of press or coverage that any organisation would desire.

As with everything, a strong start puts you in a strong position. Effectively cleansing, compiling and validating your data ensuring the regulations are accurately followed is key in accurately calculating your pay gap.  I am a believer in ‘rubbish in, rubbish out’ so making sure the foundations to the calculations are correct is where most of my time is spent.  Do you have the right people included and excluded from the calculations? Employees on furlough on this year’s snapshot date will add an extra complication to the calculations with extra care being needed to correctly evaluate their position.  Where employees have left during the relevant pay period, cross check that their pay and allowances reflects the hours worked to correctly calculate the hourly rate and that all payments relating to the termination are excluded.  Looking whether bonus payments received in the relevant pay period are correctly prorated.  There are so many variations and nuances, and no data set is ever the same, but it is essential to get this right from the start.

Publishing a comprehensive narrative alongside your pay gap should reflect the ethos, attitude and values of your organisation.  The majority of organisations do have a gender pay gap in favour of men or an ethnicity pay gap in favour of white employees, and I’m not saying that I’m alright with this, but this is what it is at present.  I would still consider applying for a job with an organisation that has a gender pay gap in favour of men providing that a detailed narrative is published with an action plan that lays out the steps being made to close it.  The only way to write a great narrative based on fact is to understand the numbers in the first place, and this brings me back to the preparation, understanding and quality of the data in the first instance. The ability to answer questions, responding both internally and externally is led by doing detailed analysis, not just running the numbers through a generic gender pay calculator.  

Closing the pay gap doesn’t happen by chance and it won’t happen overnight.  There are many areas that can be explored internally by reviewing your HR policies and practices and how they perform and are used within the organisation.  When recruiting, males are more likely to be successful in negotiating a higher starting salary than females leaving females as a disadvantage from the start.  Performance management can impact the pay gap if males or white employees receive higher pay increases than females or BAME employees for the same performance rating. Progression through the organisation should be governed by a robust pay structure helping to manage pay increases for promotion, but whether all employees regardless of gender or ethnicity receive the same can only be understood by further analysis.

We don’t know yet what will happen in 2021 for gender and ethnicity pay reporting, but only by starting to review and change now can an improvement be achieved next year. Having an independent and experienced consultancy to review you data, guide and advise you will help you to prepare not only your headline figures, but also and more importantly your narrative. Don’t leave it too late! Contact us today on +44 (0)20 3457 0894 or email sarah.nash@innecto.com.

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