Where gender pay gap reporting is concerned, new research has shown that many organisations are finding the process confusing and misleading and fewer than half of UK companies think the requirement to publish their gender pay gap will have any impact on closing it.
Mercer’s 2017 Gender Pay Gap Reporting survey was to further last year’s research conducted to gain information from HR and Reward professionals on their awareness, concerns and plans surrounding the legislation. It was also seeking to discover how far organisations had progressed. Participants were found to welcome changes in the regulations and are in favour of the legislation in principle. It is clear that HR professionals implementing the legislation are concerned about the complexity, difficulty and misleading nature of the measures used and therefore, a lot of effort is expected to be made in clarifying and explaining the results - both internally and externally.
A study by Mercer of 165 companies revealed that 41% found the process complex; 29% thought it was confusing and 28% found the rules misleading. Just 7% described the process as comprehensive and only 3% said it was simple.
Of the businesses taking part in the survey, almost 44% plan on reporting later in the year –whilst 28% said they do not know when they will report.
Charles Cotton, senior performance and reward manager at the CIPD stated, “Employers shouldn’t be tempted to put off reporting to the last moment. If they haven’t already started, they need to think about how they communicate to employees, potential workers, existing customers and other stakeholders, what the figures mean, and what action they are going to take and why.”
Mercer also found that 70% of the organisations surveyed would release an explanation of their gender pay figures along with the hard data.
Chris Charman, principal and reward expert at Mercer said, “Although committed to the principle of reporting, many UK companies feel the figures will show an overly simplistic view and so see a need to explain further to their staff and shareholders. Many companies are concerned about the risk of reputational damage when publishing their figures, especially as there still seems to be much confusion between the gender pay gap and the legal requirement of equal pay for equal work.” He added, “Most organisations are focused on getting to grips with the figures and developing a narrative to explain. Leading organisations are well advised to think about how they can be looking ahead in order to be making improvements in future years. At the heart of this is looking at root causes, which can be found in pay, female promotion and the jobs that men and women predominate in.”
Mercer’s point of view on Gender Pay Gap reporting is partly about pay, but largely about workforce profile and dynamics - such as hiring; promotion rates of women versus men and occupational segregation. They state that understanding the wider issue requires insight, but real success comes from recognising this as a business issue – higher levels of diversity in organisations are associated with greater business performance and innovation.
