For many UK companies left reeling from the blow of Covid-19 in the spring, submitting gender pay gap data in time for the April deadline will have been low on the list of priorities.
But then, less than two weeks before the deadline, the government lifted the requirement to report. As a result, nearly half of 10,000 eligible employers chose not to submit their figures.
“In hindsight, [the suspension] looks like an overly hasty reaction,” says Denise Wilson, chief executive of the Hampton-Alexander review, the government-backed-body set up to increase female representation on boards.
As this is the third year of reporting, the data will, in many cases, have already been compiled by companies, she says, and not to report it sends the wrong signals internally.
Of 10,000 organisations that are normally required to report, 5,822 went ahead despite the suspension and submitted their 2019-20 gender pay gap data. Financial Times analysis of these figures revealed an increase in the average gap between what men and women are paid, from 11.9 per cent to 12.8 per cent in the year to April. Some companies reported after the deadline.
“No doubt, some will have found that this year was a very convenient reason to go even slower,” says Ms Wilson, but she is confident that most employers now see closing the imbalance between what they pay male and female employees as a long-term business objective.
Despite the “short-term blip”, she hopes remaining companies will report later, although there is no obligation.
Under the normal rules, companies with more than 250 employees must report their mean and median gender pay gaps, bonus pay gaps, and the proportion of men and women in each pay quartile and receiving a bonus.
For Peter Cheese, chief executive of the Chartered Institute of Personnel and Development, the big drop in companies reporting is a concern, because it indicates some still view the initiative as a compliance issue.
Part of the problem with the reporting requirements, he says, is that publishing an action plan alongside the data is not mandatory. Of those that reported this year, 31 per cent did not submit any supplementary information with their data. “If I reported profit and loss with no commentary, what would that say? Numbers need narrative,” he says.
Rebecca Hilsenrath, chief executive at the Equality and Human Rights Commission, responsible for enforcing gender pay gap reporting, says lifting this year’s requirement was justified in order to relieve pressure on employers.
“Just because enforcement has been suspended temporarily, does not mean that reporting on gender pay gaps and creating action plans to reduce them isn’t still the right thing to do,” she says.
Among the companies that did report were Lloyds, Shell and EY. All say they have seen benefits from doing so.
Fiona Cannon, director of business, sustainability and inclusion at Lloyds Banking Group, says the company will continue to submit gender pay data, regardless of government decisions.
“It is important to carry on reporting because otherwise things can fall off the agenda quite quickly,” she says.
The group reported a big median gender pay gap of 33.5 per cent, a reflection of its high proportion of men in senior roles. Six years ago, the group set a target to have 40 per cent of management roles filled by women by the end of this year. It reached 36 per cent in 2019.
“The biggest challenge internally is that sometimes people think the gender pay gap is ‘done’,” says Ms Cannon. “This is really hard work. You have to keep on it all the time.”
Justine Campbell, UK and Ireland talent managing partner at accounting and audit firm EY, which had a median gender pay gap of 13.8, says that while the reporting requirement is taken for granted, “it would attract attention if we didn’t do it”.
While the firm is making progress on internal female partner appointments, Ms Campbell says hiring from outside is a challenge. “Senior females are hard to come by, and organisations want to hold on to them,” she says.
Shell UK reported a median gender pay gap of 18.7 per cent. “Continuing to be transparent about our performance and how we are holding ourselves to account really matters — and that meant meeting the deadline,” says Sinead Lynch, UK country chair at the energy group.
Ms Wilson points to a grassroots drive that is helping to push gender equality within organisations. “Employees are finding their voice on this topic in a way that they haven’t before,” she says. “Ultimately, you have to rely on companies doing the right thing. Let’s hope they will.”
Additional data reporting by Aleksandra Wisniewska
Source: Financial Times