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Olivia McEvoy, Director, Diversity and Inclusion, People Advisory Services

Gender Pay Gap Reporting – Recognising the opportunity

EY - Olivia McEvoy

Gender pay gap reporting is much more than a compliance exercise. Addressing your gender pay gap is an opportunity to improve diversity across your organisation and create a powerful narrative that enhances your reputation and raises your attractiveness to a diverse pool of talented employees.

What is the gender pay gap?

The ‘pay gap’ is the difference in average pay between two groups in a workforce. In the case of the gender pay gap, it is the difference in average pay between males and females in a workforce. The ‘pay gap’ and ‘equal pay’ are different. Equal pay is being paid the same for the same or similar work.

The Gender Pay Gap Information Bill

The General Scheme of the Gender Pay Gap Information Bill is expected to be enacted by the end of 2019 in Ireland, giving organisations ample time to prepare before the actual publication date which is likely late 2020 or early 2021.The ensuing regulation will apply to both public and private sector entities. It will immediately affect those with over 250 employees. After two years, it will affect those with over 150 employees and after three years those with over 50 employees.

How will it be enforced?

There are two mechanisms mooted to require employers to comply with the legislation including an application for an order to the Circuit Court and to the Workplace Relations Commission. In addition, officers will be designated to investigate a sample of employers to ensure that the information published is accurate.

Lessons learned from the UK

Following the requirement for organisations in the UK to report their gender pay gap in 2018, EY conducted analysis of selected reports for 575 UK employers, with the below emerging as the most common reasons behind the gender pay gap:

  • Seniority – lack of female representation at senior levels
  • Outsourcing – low paid roles can skew the gender pay gap
  • Occupational segregation – many occupations are stratified by gender
  • Overtime payments – in some industries a large proportion of salary is overtime pay (e.g., construction). If this information is not included it can skew the gender pay gap.
  • Seniority – lack of female representation at senior levels
  • Part-time working – more women hold part-time roles
  • Bonus – if bonus payments are not pro-rata they can be anomalous
  • Motherhood pay penalty – women lose development and progression opportunities during maternity leave
  • Absence – complete absence of any gender can skew the gender pay gap results

Finding the root cause of a gender pay gap can be complex. It is often not singular in nature, and cultural as well as structural barriers are at play. ‘Smart working’, often called ‘agile’ or ‘flexible’ working, is the most common action companies took to address the gender pay gap in the UK. Smart working also increases productivity, reduces costs and improves brand reputation.

While the focus of the gender pay gap is often on women, I believe we need to ensure solutions to address the gap e.g. workplace flexibility are reason neutral rather than primarily aimed at people with family responsibilities. Indeed, it has to be reason neutral if it is to be a success and until our way of working changes for people as a whole, including men, it will not change for women. We also need men to understand this is not a zero sum game and to feel they have legitimacy to play a leading role in the action to achieve gender equality.

Other factors to consider to lessen the gender pay gap in your organisation include:

Those who choose to see gender pay gap reporting as an opportunity to enact change will soon experience the countless benefits associated with having a more diverse workforce, forming an integral part of a more equal and prosperous economy and society.

For an overview of how EY can help you, wherever you are on the gender pay gap journey, please click here.