‘Employers need to link gender pay gaps and action to reduce them’

Only eight per cent of organisations have acted as a result of publishing their gender pay gap data, according to an analysis of last year’s figures just published by the Chartered Institute for Personnel and Development.

The CIPD’s report, Not just a number: lessons from the first year of gender pay gap reporting, says the lack of action highlights that organisations “have yet to recognise the implications for gender pay gap reporting and to connect the results of their analysis to changes in practice”.  Although many said there actions were ongoing outside of the gender pay gap reporting process, the CIPD says they  need to ensure they are connected to the outcomes of the reporting process and provide clear narratives that outline if and how progress is to be made.

It adds that when actions are taken, they tend to be focused on flexible working and recruitment practices. While these may be likely to lead to change over the long term, they could lead to short-term negative consequences, says the CIPD, for example, recruiting women into low-paying roles to improve the talent pipeline to senior positions. It says these effects should be outlined by HR teams in their action plans.

Over half (51%) of the 731 HR professionals surveyed stated they had produced a supporting narrative alongside their gender pay gap data. However, the report  says there is a lack of awareness and understanding about gender pay gap reporting and its impact, suggesting that not all are aware of the importance of gender pay gap reporting or of what their organisation is doing about it.

Over a quarter (26%) of HR professionals said they expected to see a positive change or no change in their gender pay gap between 2018 and 2019 and were optimistic that they had planned better for 2019 than 2018.

The report highlights a link between organisations that are more inclusive and those that are positive towards gender pay gap reporting and the CIPD says gender pay gap reporting “could be a useful signal of organisation-level inclusivity, something of interest to stakeholders such as regulators and investors”.

It states: “Our findings demonstrate that more-inclusive organisations tend to demonstrate positive gender pay gap reporting behaviours, such as producing supporting narrative information, and utilising reporting to consider the impact of inclusion strategies. This is a positive development that should encourage researchers and practitioners alike to
further develop gender pay gap reporting as a part of a wider inclusion agenda.”

Recommendations for HR include the need to analyse figures and promote inclusivity generally. The report also calls for the Equalities and Human Rights Commission to enforce the publication of action plans and investigate when compliance issues occur. For policy makers and business leaders, the report’s recommendations include a call to focus on the reasons behind gender pay gaps.

It concludes: “Reporting alone is unlikely to fix the gender pay gap, but with more emphasis on actions and greater encouragement on business to take a leadership role, it is likely that over time positive progress can be made.”

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