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The recent spate of gender-related scandals in UK business is dominating headlines of late. Whether on a large scale, such as the salary disparities at the BBC, or in lesser known cases such as unequal pay in the gig economy, the debate over equality is now more pertinent than ever.

News that Iceland recently made it illegal for men to be paid more than women struck a chord around the world, demonstrating a progressive move that could effect positive changes in the UK. These changes, however, also pose challenges for businesses – in particular, the forthcoming gender pay gap report deadline on April 4 this year.

What is the gender pay gap report?

The gender pay gap report affects both the private and public sector, the latter of which has a March 30 deadline. In time for these deadlines, all organisations in the UK currently employing more than 250 people must publish information on gender pay gaps within the workplace.  This amounts to six specific calculations:

  • Average gender pay gap as a mean average
  • Average gender pay gap as a median average
  • Average bonus gender pay gap as a mean average
  • Average bonus gender pay gap as a median average
  • Proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
  • Proportion of males and females when divided into four groups ordered from lowest to highest pay

The results of these calculations must be published on both the employer’s and a government website, with written confirmation from a senior member of staff such as a chief executive. The report will affect approximately 9,000 businesses across the UK.

Why has the gender pay gap report come about?

Unfortunately, due to recent media scrutiny, this new legislation is painting a somewhat unfavourable picture of what started out as a move to improve businesses’ HR operations. From a CIPD point of view gender is just one of many factors to consider when looking at how to improve the business. Other diversity-conscious factors include age and how to cope with the challenges of an ageing population, ethnicity, and hiring from within or outside the EU.

Studies show that a more diverse workforce is a more successful one. A 2014 report showed that companies with “two-dimensional diversity” were 45 per cent more likely to expand their market share. More worryingly, figures show that the current cost of under-utilising women’s skills could be as high as £23 billion. It is for these reasons that the gender pay gap report serves such an integral purpose: rather than placing companies under witch-hunt-levels of scrutiny, it gives employers a chance to review the diversity of their workforce and analyse skillsets.

What you need to do as an employer

To make the best of the gender pay gap report, you should view this as an opportunity to analyse the strengths and weaknesses of your workforce. This should start from the top – a more diverse board of directors will push the business forward by bringing together a range of ages, backgrounds and experiences, helping to provide different perspectives on your business direction.

Equally, consider what makes your individual team members diverse, whether they are inherent traits such as ethnicity, or personal life choices such as faith or sexuality. A varied workforce is more adaptable to change and therefore more likely to succeed in the long-term – something we have seen time and again at Altum HR.

Finally, while you should be mindful of the deadline date, we would advise waiting until this date to publish your results. Recent media coverage has demonstrated that those who have chosen to publish their data early are being thoroughly scrutinised, and not always positively, for example Phase Eight. If you feel that such scrutiny could be detrimental to your business, consider safety in numbers. You should use this time to review policies and publish at a time when 9,000 other employers’ names will be made public, thus reducing this risk. You can also supplement your results with a narrative, which allows you to justify any pay gaps using challenges, successes or long-term results as evidence.

The future of the gender pay gap

Whether or not the UK will follow in the footsteps of Iceland remains to be seen. The current report suggests that we could perhaps see more extreme moves  in the future; however these will be difficult to enforce and will require a review of the whole tribunal system, for example regulating workplace policies and re-examining issues such as discrimination.

However, despite pernicious media coverage, the current moves towards equality in UK legislation present us with the chance to re-think our strategies and seize new opportunities. If you’d like more information on getting the best from your workforce, please contact Altum HR on 01925 552 333.

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