On 4 April 2019, employers with 250 or more employees will, once again, have to publish and report specific figures about their gender pay gap. And, following a year packed full of political statements and unprecedented movement towards gender equality, there will undoubtedly be pressure on employers to demonstrate progress in closing the gap.
We can’t get too excited though because the way the legislation works means that this year’s disclosures relate to a snapshot date over a year ago (5 April 2018) which was prior to (or at the very beginning of) the seismic shift in attitude towards equality which defined the remainder of 2018 and was partly caused by the first set of disclosures. The figures were already in for 2019 at the point those first pay gap disclosures were made, so progress in the figures will necessarily be limited. For this reason, we do not expect the 2019 figures to be particularly noteworthy. So, what should we really be expecting this year?
- Some progress
2019 marks only the second year of mandatory gender pay reporting but the Office of National Statistics have been analysing gender pay for many more years and research shows that there has been a general (but slow) trend reducing the pay gap for the last 11 years. In 2018, the gender pay gap fell to 8.6% among full-time employees – the lowest recorded yet. We are, therefore, hopeful that the combination of today’s climate and the introduction of mandatory reporting, will see a more significant step to closing the gender pay gap in 2019. But we remain realistic – the government has said that it expects it will take five years before employers will see any real progress.
- Some (sector-specific) widening
Certain sectors, such as the tech sector, have a shortage of females at all levels and so their focus has been on attracting women at entry level. In the short term, this means that a tech employer’s gender pay gap may be inflated, as more women flood more junior positions which are, obviously, less well paid, but over time, (at least some of) these women will rise up the ranks and help close the gap.
- More detailed narratives
More detailed narratives will be needed to explain any negative or disappointing results; to provide some needed context and to ensure good initiatives do not go unnoticed (or unfairly ridiculed in the press). Narratives are currently optional – only one in three employers published narratives last year – but the Equality and Human Rights Committee (EHRC) highlighted their importance in its “Closing the Gender Pay Gap” report in December 2018. The EHRC stated that it strongly believes that all “employers should be required by law to publish a narrative report setting out organisational context” and “future plans” in a bid to improve transparency. We, therefore, expect the number of narratives, and the detail included in each narrative, to increase year on year. We also hope to see a greater focus on future plans, as we accept the long-term focus needed to close the gap.
In 2018, we saw a number of employers rush to clarify that their large gender pay gap was not indicative of a wider equal pay issue, but rather a result of having significantly more males at senior levels. We doubt this explanation will continue to run unchallenged. This year, it will be interesting to see what these employers have done/plan to do to address this… but we won’t hold our breath – only a third of the 250 respondents from the Confederation of British Industry’s recent survey said they were now placing a greater focus on gender diversity in their leadership.
- Continued focus on flexible working…etc.
In the 2018 narratives, we also saw employers focus on flexible working, family friendly policies and initiatives of mentoring and sponsorship. Whilst these attractive policies are a promising step towards closing the gap (and an absolute must-have for many millennials) we are now aware of more effective actions. The government’s helpful evidence-based-actions report lists six actions that have been tested and found to have a greater impact on closing the gap. We, therefore, expect (and hope) to see more:
- Women in shortlists for recruitment and promotions;
- Skill-based assessment tasks in recruitment;
- Structured interviews in recruitment and promotions;
- Encouragement of salary negotiation by showing salary ranges;
- Transparency around promotion, pay and reward processes; and
- Diversity managers and task forces.
We are optimistic that mandatory gender pay reporting will have a real, tangible effect on closing the pay gap but we don’t think 2019 will be where that shows – we will have to wait for 2020 for the real excitement. It is a long-term project and the very real changes in we are now seeing in the workplace on a day to day basis mean that the figures in 2020 could be well worth waiting for.