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Gender pay gap reporting is coming to Ireland

Nov 30, 2018
By Kathryn Brady 

Gender pay gap reporting is coming to Ireland. Although it is not yet clear when reporting will officially begin, draft legislation (the General Scheme of the Gender Pay Gap Information Bill) was published by the Irish government in June 2018. 

The drivers of a gender pay gap are typically diversity and demographic factors, such as the distribution of men and women across the levels of seniority, but they may also include pay factors which could represent equal pay risk areas, i.e. differences in pay between men and women performing equal work. (While this is prohibited under legislation – men and women must be paid equally for “like work”, “work of equal value” or “work rated as equivalent” – this practise can still occur.)

These are clearly very different drivers and will need to be addressed through very different means. The aim of gender pay gap reporting is to create greater transparency and awareness of the factors contributing to the gap so that it can be closed. High-level details of the metrics to be reported were included in the draft legislation and greater detail will emerge over time.

Closing the gender pay gap will undoubtedly have a positive effect on Irish women and the Irish economy. PwC’s 2018 Women in Work Index reports that closing the pay gap globally could increase OECD female earnings by as much as $2 trillion in the long-run, not only benefiting women, but the whole global economy.

Ireland’s pay gap

According to the most recently available data from the OECD/Eurostat, the gender pay gap in Ireland is 14%. Women make up 46% of the Irish labour force and, in an increasingly tight labour market, the ability to secure female talent is vital for employers. When gender pay gap reporting becomes a reality, organisations that demonstrate they are taking sizeable steps to address their gender pay gap issues could begin to attract pivotal talent. This will be particularly important for skills in short supply that are also highly mobile, such as IT.

When deciding whether or not to work for an organisation, for example, 82% of female millennials identify an employer’s policy on diversity, equality and workforce inclusion as important. Gender pay gaps are likely to feed into a candidate’s assessment of an organisation’s commitment to diversity and inclusion.

Challenges and opportunities

Although the gender pay gap in Ireland has been reported on for some time, a formalised approach to reporting will provide much greater insight, specifically about the gaps that exist in individual organisations and across sectors. While details are not yet available, we expect that employers will be required to report their gender pay gap information to a designated public body, as well as publishing details on their websites. This level of transparency is likely to bring a high degree of scrutiny for companies from a range of stakeholders including boards, shareholders, employees, the media and regulators, as has been the case in the UK. 

For those employers who are embracing diversity and inclusion, gender pay gap reporting presents a positive opportunity to strengthen their brand by promoting their efforts publicly. For those who are yet to embrace the topic, it will provide a chance to understand the reality in their company, why a gender pay gap exists and what the key contributors are. They can then begin to make data-informed decisions.

Regardless of an organisation’s track record on diversity and inclusion to date, the impetus for Irish employers to be proactive now is clear. Reflecting on experiences in gender pay gap reporting in the UK, here are some key lessons for Irish employers:

  • start early in your reporting; 
  • develop your narrative and action plan; 
  • communicate proactively to stakeholders; 
  • take action to close the gap; and 
  • consider sector collaboration to address any issues.

Next steps

The timeline for introducing gender pay gap reporting in Ireland is not yet clear as the Bill is at the beginning of the legislative process. However, this is an opportune moment for employers to prepare as the topic is clearly on the government’s agenda. For those wishing to make the most of the opportunity, now is the time to act. By reflecting on the lessons learned in the UK, organisations can position themselves well for whatever gender pay gap reporting will entail.

Kathryn Brady is a Director of People & Organisation at PwC.