Gender pay gap reporting is coming to Ireland. Sonya Boyce explains how you can prepare for this essential step towards gender pay parity.

The gender pay gap is the difference between what is earned on average by women and men based on average gross hourly earnings of all paid employees – not just men and women doing the same job or with the same experience of working patterns.

The Gender Pay Information Bill 2018 will be enacted in Ireland imminently. It will require mandatory gender pay gap reporting for public and private sector companies. This Bill follows a European trend where other countries, including Germany, France and Spain, have introduced similar legislation requiring organisations to publish information about the pay awarded to colleagues based on their gender.

Such legislative developments have arisen in response to the fact that women in the EU are paid, on average, over 16% less per hour than men. In Ireland, the average gender pay gap is 13.9%. The World Economic Forum’s Global Gender Gap Report 2017 states that, if enough measures are not taken to address the gender pay gap, it will take 100 years to close the gap in the 106 countries included in the study.

The big picture

Gender pay gap (GPG) reporting is not just about equal pay; it is an initiative to introduce gender pay gap reporting as part of a wider initiative to address female participation and employment gaps between genders. GPG reporting is seen as the first step in addressing parity in the employment market in terms of gender, particularly at the management level.

It is hoped that the introduction of GPG reporting will provide organisations with an incentive to develop female-focused strategies and initiatives to build greater representation in their workforce, not only from a gender perspective but across the broader spectrum of diversity and inclusion.

Encouraging a diverse and inclusive workplace is proven to strengthen the culture internally and develops an employer brand of choice to retain and attract the talent needed. It also enables organisations to deal with any inequities they have and show stakeholders a demonstrated commitment to diversity and inclusion. As Tim Cook, CEO of Apple, says, “Inclusion inspires innovation”. Diverse teams are smarter, more likely to generate new product ideas and enter new markets.

Preparation

In advance of the upcoming legislation, I advise all organisations to undertake a few key steps.

First, you should review the employee data you hold about your workplace population. This data will include payroll and human resource information. Once data has been compiled, organisations can calculate your gender pay gap.

After that, it is essential to building a narrative to explain and provide background information on the gender pay gap figure within your organisation. This narrative also serves to reassure employees, potential employees and other stakeholders as to why a gender pay gap figure exists.

Lastly, organisations should develop and communicate an action plan on how it will work to reduce the gender pay gap figure. By outlining and delivering an effective action plan, it will ensure all stakeholders remain motivated and there is no reputational damage to an organisation.

The bottom line

McKinsey 2018 research suggests that companies in the top quartile for gender diversity on their executive teams were 21% more likely to experience above-average profitability than companies in the fourth quartile. Diversity and inclusion have a positive impact on the bottom line and profits, and GPG reporting is a critical and tangible metric that management can rely on to ensure that women are paid fairly, being considered for promotion and being promoted and attaining senior-level management positions. The introduction of mandatory gender pay gap reporting is an essential step towards ensuring gender parity and fairness about pay and progression.

Sonya Boyce is a Senior Manager in HR Consulting in Mazars.