The median pay gap figure for applicable employers has got worse, according to initial analysis from the CIPD.
Employers have just filed their gender pay gap figures for the second year amid a lot of media interest. The latest figures show the median pay gap has risen from 9.2 percent to 9.6 percent overall.
However, these figures should be treated with caution given that we are still in the early days of reporting and changes may well not have bedded in yet. It should also be noted that addressing the causes of their gender pay gap could well lead to an organisation’s figures getting worse in the short-term.
The jury is still out on how effective gender pay gap reporting will be in driving meaningful change. But what is clear is that organisations that publish a narrative and action plan to accompany their figures, at least show they are taking the exercise seriously. They are the ones who stand to make their workplace more inclusive in the long-term.
Firstly, a narrative acts as confirmation that an organisation understands its figures and the reasons for its gender pay gap. An action plan then commits an employer to look at how it can foster a more inclusive workplace by improving the way it recruits, manages, rewards and develops its people.
It is therefore a real concern that around one third of organisations are continuing to publish their pay gap figures in isolation. Just like a business would never release a set of financial results without an explanation, the same should be true for their gender pay gap figures.
Lessons to be learnt
Firstly, it should be standard practice for organisations to publish a narrative and action plan when reporting their figures. Without them, the practice becomes devalued and is not much more than a tick boxing exercise. If not enough employers publish these, then in time they will be made mandatory.
HR professionals should work with colleagues in their own team, and across the wider business, to interpret their gender pay gap data and help write and deliver on an action plan.
In our new report, Not just a number: lessons from the first year of gender pay gap reporting, we found that employees aren’t often consulted about how to best address the gender pay gap in their organisation.
There are several ways that businesses can tackle their gender pay gap and they should get feedback from their employees about what would be most effective. This can include introducing a wider range of flexible working arrangements, as well as not asking a candidate for their current salary during the recruitment process. HR should lead these discussions between employees and senior leaders.
With growing expectations for businesses to be more transparent from employers, investors and regulators alike, it’s safe to say that pay gap reporting is here to stay. It’s even likely that the government will introduce ethnicity pay gap reporting next year. HR professionals need to get used to reporting on pay gaps and ensure they are making the most of the opportunity to become a more inclusive employer.