The gender pay gap data your business discloses is powerful. When supported by a detailed analysis and narrative, it can:
- provide insight to your investors, employees and other stakeholders about the levels of equality and male and female participation in your organisation;
- identify any areas of concern that talent is not being successfully maximised; and
- set out the remedial actions you are taking to address those concerns.
Mandatory requirements for UK employers with over 250 staff to disclose their gender pay gap came into force on 6 April 2017.
The first reporting cycle has just been concluded. EY’s analysis reveal that men are paid more than women, based on the median hourly pay, in 77% out of the 10,462 organisations that had filed by 2 May.
Only 9% of entities reported paying men and women equal.
Based on median bonus pay, 68% of organisations awarded higher bonus payments to men.
Many organisations referred to the low levels of women being appointed to the highest level jobs in an organisation to explain their pay gaps. In fact, our analysis showed that 65% of organisations reported having less than 50% women in the upper quartile; 41% reported having less than 30% women in the upper quartile; and 12% reported having less than 10% women at the top.
The initial reporting cycle has shed light on structural inequalities that companies do not want to ignore. The focus now should be on measures to move the dial demonstrating progress in next year’s disclosures.
In our experience of working with organisations to assure their gender pay gap disclosures, it has become clear that many companies underestimate the complexities of the regulations and the time and effort going into collating the data and calculating the numbers. Our analysis found many examples of organisations that have not had their disclosures independently verified and reported data that is statistically unlikely or even improbable, such as having identical average gender pay or bonus gaps measured by both the mean and median – 1.5% and 4.6% of reporting entities respectively.
Interestingly, 149 organisations (1.4%) reported a zero bonus pay gap even though they awarded bonus to a proportion of their employees. 75 of those, about 50%, awarded a bonus exclusively to men or women making it impossible to claim a zero gap.
Our analysis also showed that over 200 entities have restated their disclosures at least once.
How EY can help
EY’s Gender Pay Gap Reporting are designed to work collaboratively with you to build confidence in your gender pay gap disclosures, help analyse root causes and assure the effectiveness of initiatives targetaimed at addressing these, co-develop strategies for continued improvement and design a culture where people thrive at work.
We can help you:
- identify errors in the way you apply the Regulations to calculate your gender pay gap
- build and strengthen internal systems and controls for collecting and reporting gender pay gap data
- increase confidence in the accuracy and completeness of data and build credibility and trust amongst internal and external stakeholders that you are committed to gender equality
- Identify root causes and help you close the gap by suggesting targeted proven interventions
Our robust approach follows the requirements defined by the International Standard on Assurance Engagements (ISAE) 3000, the recognised standard covering this type of non-financial reporting.
Our insights and the future of pay assurance and reporting
Watch our two videos below, to hear from our team about our insights from working with clients, and the future of pay assurance and reporting.
EY insights from working with clients
The future of pay assurance and reporting
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1. Sources: “New research from The Peterson Institute for International Economics and EY reveals significant correlation between women in corporate leadership and profitability.” EY website, https://www.ey.com/US/en/Newsroom/News-releases/news-ey-new-research-from-the-peterson-institute-for-international-economics-and-ey-reveals-significant-correlation-between-women-in-corporate-leadership-and-profitability, accessed on 8 February 2016.
2. Sources: Women Matter: A corporate Performance Driver, McKinsey & Company, 2007; Global Gender Gap Report 2014, World Economic Forum.
3. Sources: Scaling up: why women-owned businesses can recharge the global economy, EYGM Ltd, 2009; Global Gender Gap Report 2014, World Economic Forum.
4. Sources: “When Women Rule, Nations Prosper,” Columbia Business School website, http://www8.gsb.columbia.edu/articles/node/1633, accessed on 6 January 2015; Global Gender Gap Report 2014, World Economic Forum.
5. Sources: The Credit Suisse Gender 3000: Women in Senior Management, Credit Suisse Research Institute, August 2012; Global Gender Gap Report 2014, World Economic Forum.