Gender pay gap reporting must lead to action

The Gender Pay Gap Information Bill 2019, currently making its way through the Dáil, will require employers to publish information about the remuneration of staff by gender.

Where differences exist, it will require them to publish a statement setting out the reasons why and the measures taken, or proposed, to eliminate them.

When it was published in April this year, Minister for Justice and Equality Charlie Flanagan said the aim of the Bill was to provide transparency in relation to the gender pay gap, with firms able to report a low, or non-existent gender pay gap as an advantage when it comes to recruitment.

The provisions will apply initially to firms of 250 or more employees with the threshold reducing to 50 thereafter. It will apply to both the private and public sectors.

The detailed information that must be published under the regulations includes the mean (average) and median (middle value) gap in hourly pay between men and women. Employers will have to show the mean and median gap in the hourly pay of part-time male and female employees too.

It will include the percentage of men and of women who received a bonus as well as numbers relating to those who received benefits in kind.

The regulations may also require the publication of information on employees on temporary contracts, the percentage of employees in each of the four pay quartiles who are men and who are women and the publication of information by reference to job classifications.

The publication of a statement relating to each employer’s gender pay performance will be required annually. If there is a gap, they will have to explain it and the measures being taken to reduce it.

Gender balance, diversity and inclusion are key to the competitiveness and growth of Irish business and to developing the workforce of the future, according to Kara McGann, head of social policy at Ibec.

Closing the gender pay gap (GPG) is an important part of it. “The most recent figures available put Ireland’s GPG at 13.9 per cent, lower than the EU average of 16.7 per cent, and the 11th lowest of the 28, but these are 2014 figures and so likely to be out of date,” she says.

Mandatory reporting will ensure such figures are kept current. It will help clarify the issue in other ways too. “As a topic, gender pay gap can be confusing,” says McGann, who says it is often confused with issues around equal pay, which is not quite the same.

It’s not about hiring two people to do the same job and simply paying the man more. “The gender pay gap in a company represents the gap between the pay of all the men working in that company and that of all of the women. It doesn’t indicate bias but if more women hold more lower-paid jobs in a company, you’ll have a bigger pay gap.”

Welcome diagnostic tool

It’s part of the ‘whole society strategy’ that is required in relation to diversity and inclusion and is a very welcome diagnostic tool for employers to use.

There are very many societal factors contributing to the gender pay gap which, McGann suggests, range from the high cost of childcare right back to the practice of girls’ schools not facilitating mechanical drawing.

“These are the type of factors that force children to make the kind of career choices very early on that results in segregation later on,” says McGann.

The high cost of childcare is another factor. “It often results in a partner having to step out of the workforce for a while, and more often than not, it’s the woman. What these factors show is that change requires a ‘whole of society’ approach. We have to stop seeing the GPG as a women’s issue, and recognise it as an issue that affects all of society.”

It makes sense, given that all of society suffers where a lack of inclusivity exists. “It means we’re not getting access to 100 per cent of the talent pool available to us as a country. The idea that you only recruit on merit is fine, but if you are not recruiting from a pool of 100 per cent of the talent, then you are not really recruiting on merit at all.”

Greater levels of diversity and inclusion are proven to benefit organisations in terms of financial performance, creativity and innovation.

Employers get that. “Gender equality is about more than equal pay for the privileged few. It is a hugely complex challenge. A diverse workplace is critical in today’s rapidly-changing, globalised economy, enabling organisations to create products and services that reflect their customers’ needs, fill talent gaps, and ensure sustainable growth,” says David Anderson, president international at Mercer, and finalist for Manbassador of the Year award at the PWN Global Leadership Awards.

“At Mercer, we know that when women thrive, businesses thrive. We know that organisations with more women in leadership report higher profitability and increased female participation throughout an organisation which positively impacts overall productivity. Gender diversity is good for macroeconomic growth, increasing GDP and further bolstering social security systems.”

Closing the GPG helps men too, of course. “It’s not doing women or men any favours by not giving men access to a better work-life balance too, simply because of adherence to old-fashioned stereotypes,” says McGann.

Societal shift

As such, the enactment of the Gender Pay Bill is part of that societal shift. “What gets measured gets talked about and actions result,” says McGann. Having to publish figures will change the conversation, opening up questions about hidden barriers such as, perhaps, the premium put on people with financial experience in companies, versus those with people experience.

Challenging the status quo in this way has the potential to boost the numbers of women at board level, providing invaluable role models for other women, which matters. “Not being able to see role models stifles opportunities for others coming up through the ranks.”

Equally, the advent of GPG statistics will help change the narrative around childcare as an issue for mothers, as opposed to being one for working parents. It should also help change attitudes towards people who are returning for work after an extended period of leave (such as for parental care), challenging those old stereotypes around ambition, she says.

“What the GPG bill will do is enable employers to say ‘Right, if we find a gender pay gap at entry level, is there something about our culture that is not attracting women to us? And if we do not have enough women in middle management, which coincides with the prime childbearing years, do we need to check our work-life practices, or our policies on flex working?’,” says McGann, who adds: “It’s going to take everyone to get on board with this.”

Employers are supportive. “We’re encouraging them to start pulling in their data now and putting an action plan in place. The GPG figure is just a figure, it’s the actions that will make the change.”