Gender pay gap legislation was signed into Irish law in July this year and while it’s proposed to roll it out in 2022, there is still no firm deadline in sight on this yet.
Companies are naturally keen to understand how the initiative will be implemented so they can begin working towards it, particularly in relation to their internal procedures. That said, companies can prepare now by looking to the UK to learn some lessons from the rollout of similar legislation there.
Gender pay gap legislation seeks to redress the imbalance between the average earnings of men and women and will mandate organisations to annually report figures illustrating the extent of the pay gap between what women and men earn as a group.
Employers will be required to publish the following data on their workforce: The mean and median gap in hourly pay between men and women; the mean and median gap in bonus pay between men and women; the mean and median gap in hourly pay of part-time male and female employees; the percentage of men and of women who received bonus pay and the percentage of men and of women who received benefits in kind.
But perhaps most importantly, the legislation will also require employers to provide an explanation for the reasons for any gender pay gaps and outline measures being taken to address any such gap.
If anything can be learned from the UK rollout of gender pay gap reporting it is that context is key to framing and clarifying what the pay gap is, why it exists, how it is communicated and what the organisation intends to do to reduce it.
In the UK, positive feedback was received by organisations that focused on developing a fundamental understanding of underlying issues behind the gender pay gap.
In contrast, organisations that were perceived to make excuses for the gap, abdicated responsibility or were overly defensive or dismissive were staunchly criticised.
It is important to note that the gender pay gap does not necessarily mean unequal pay.
It is critical for organisations to communicate this point internally, as employees and other stakeholders may leap to the conclusion that men and women are not being paid the same for the same work in any given organisation.
This is unlikely to be the case as paying women less than men for the same job, purely on account of their gender, is illegal. The gender pay gap is considerably more complicated, and its root causes are often far more nuanced and challenging.
The gender pay gap refers to the difference between what is earned on average by women and men. It compares the pay of all working men and women; not just those in similar jobs, with similar working patterns or with similar competencies, qualifications or experience.
The difference is subtle but important. For most organisations unequal pay is not the primary cause of the pay gap.
Instead, it has more to do with occupational segregation, over representation of women in part-time roles, unequal opportunities for promotion across gender lines, as well as societal norms and employment biases.
Put simply, if female employees hold more lower-paid jobs in an organisation than men, then the gender pay gap will be wider.
It is only by addressing the root causes that companies will be able to reduce the gender pay gap. Consequently, it may be helpful to gather additional information and metrics to help build a more comprehensive narrative about your organisation’s gender pay gap.
Additional information might include the type of sector the organisation is in, whether it is a male or female-dominated industry and how your figures compared to national and industry averages, the number of males and females within the organisation as well as their length of service, department, seniority level and whether they engage in full-time or part-time work.
The UK experience indicated that gathering this information provides insights into where gender imbalances are likely to occur. It also helped pinpoint if any imbalances exist at entry level or whether they emerge at a later stage or if imbalances are limited to specific departments or roles.
Choosing to consult with employees along the way is also highly recommended and outside expertise should be drafted in as required.
Even where the news is not positive, it is preferable to communicate any results internally first, rather than having employees discovering them through government websites or news headlines
By analysing these figures employers can identify any areas where they may have acted inappropriately or in a discriminatory manner.
As per the UK experience, employers should include the specific, meaningful and measurable actions their organisation intends to take to tackle the issue.
It is also important to note at this point that resolving the gender pay gap will take time. It is not simply a matter of paying women more, but of reviewing and improving recruitment processes, introducing flexible working, reviewing career development opportunities and redesigning bonus schemes.
While this might all sound like a lot of effort, ultimately a reduced gender gap will result in increased female workforce participation rates which will benefit employers and society at large.
Anne Reilly is founder and CEO of Paycheck Plus