The importance of the gender pay gap Bill

Research shows that the gender pay gap in Ireland is widening. With the Gender Pay Gap Information Bill making slow progress, there are calls for this key piece of legislation to be re-prioritised.

A focus on other priorities, such as coronavirus, may go some way to explain delays but companies have an opportunity to get ahead of mandatory reporting to understand their own gender pay gap.

The European Commission announced a five-year strategy in March 2020 that includes legislative proposals on pay transparency. Binding measures aimed at increasing pay transparency and providing enforcement mechanisms are due to be published by the end of the year. While we do not know what form the EU measures will take, the announcement should re-prioritise the Bill here, Anne Kelleher, director head of reward services at Deloitte says.

Connection

In the UK and Australia, gender pay gap reporting has already progressed and this has given Irish companies the opportunity to see what has worked well there. Using this time wisely to define and implement initiatives and programmes that address the current gaps gives companies an advantage in helping their organisations understand the topic, Kelleher says.

“Framing the numbers and making the connection for employees between the data and business strategy and performance will foster a greater understanding of the topic. This in turn can drive greater emotional connection for employees in being part of the solution,” she says.

From Deloitte’s perspective, while gender pay gap reporting alone will not solve the issue of gender balance in Ireland, it will enable companies to pinpoint their challenges and focus on identifying solutions that have the biggest impact.

“The legislation is needed in order to encourage more companies to make changes, as data is key to a consistent assessment of the issues at play and the areas where companies need to focus. However, the most important aspect of the legislation is that it enables companies to reflect on what the data is telling them and be innovative on what is possible. They can use this data to make real measurable changes to increase female participation and career development in the workforce and utilise every stage and level of the organisation’s career life cycle to design initiatives that change behaviours and ultimately drive a more inclusive work environment.

“Companies, by understanding their own gender pay gap, will hopefully support greater collaboration between government and the business community in addressing the greater societal challenges such as the concentration of women in lower paid roles and caring responsibilities, and biases in many aspects of our education system and work practices,” she says.

Gender diversity

Through Bord Bia’s work with the Agri-food Diversity and Inclusion forum, they are strong supporters of the 30% Club global campaign for greater gender diversity. Here are three messages the group would regularly espouse to: “the importance of gender pay gap reporting in improving transparency on gender related issues including pay; providing a clear understanding on the focus on gender representation as opposed to equal pay, particularly as the gender imbalance at senior roles is viewed as the biggest driver of the gender pay gap; and finally the importance of not just reporting for reporting sake, but as a baseline for real and sustainable action,” Tom Tully, industry talent manager at Bord Bia says.

“It all comes back to the need to ensure we are getting diversity of thought within organisations, and if females are not being represented, then we are losing a large swathe of innovative thinking,” he says.

While it’s disappointing to see a slight increase in the Irish gender pay gap (approximately 14 per cent , up from 13 per cent in 2013), there are many factors at play here, Kelleher says, the most common being a higher proportion of males versus females in high-earning roles within companies in Ireland.

“With a June 2020 National Women’s Council of Ireland survey finding that 85 per cent of women have increased care responsibilities since Covid-19, a focus on gender equality needs to form part of the Government’s recovery plan to ensure the gender pay gap does not continue to widen,” she says.

Tully says without a full implementation approach in place, it can’t be said for sure that the gap is worsening. A PwC report earlier this year suggested the possibility that the gap might be widening, however, the study also suggested that the gap in Ireland was considerably narrower than in many other countries and half the OECD average.

While we wait on legislation to be progressed, there are many things companies can do to move this along.

“Many Irish employers are already taking action – firstly many have UK operations so have already been formally involved in gender pay gap reporting since it became a requirement there in 2017. In addition, in advance of the Irish requirement being finalised, many companies are now voluntarily reporting their gender pay gap, but more importantly are also publishing their plans to address and reduce the gap. The old adage of what gets measured gets done is key in this area,” Tully says.

Companies should build awareness by starting to engage with the relevant stakeholders on gender pay gap reporting and ensure that it is on the agenda at the highest levels in the company, Kelleher says.

“Companies can review HR, IT and payroll systems to ensure the information needed is readily available to report the data required. Companies should aim to complete a trial analysis and calculations to identify the gender pay gap issues. This gives businesses an opportunity to identify initiatives and plans to address the gap before reporting is mandatory. In doing so, companies can consider changing policies and practices in key areas, for example, recognising and rewarding female talent, addressing gender bias at the recruitment stage, cultural barriers for women in the workforce and implementing unconscious bias training for employees at every level in the organisation,” she adds.