Employment and pensions

Equality Pay: Risk, Refine, Report | Four months to go – time to tackle gender pay!

Published on 3rd Dec 2018

The gender pay reporting deadline is 4 April 2019 - Is your business ready for it?

Whilst the legal obligation to report on gender pay only applies to employers with 250 or more employees, pay risks impact businesses of all sizes – from recruitment and retention to employee relations and potential legal claims, through to reputational damage and investor/stakeholder concerns - in the UK and beyond.

Our Risk, Refine, Report solution addresses these risks through a bespoke strategy for your business.

Why should you be concerned?

Gender pay gaps hurt businesses. Research from the Equality and Human Rights Commission report published in October 2018 shows that:

  • 61% of women would take an organisation's gender pay gap into consideration when looking for a new job;
  • 58% of women would be less likely to recommend their employer if it had a gender pay gap;
  • 56% of women said a gender pay gap would diminish their motivation and commitment to their role;
  • 25% of men said a gender pay gap would diminish their motivation and commitment to their role;
  • 60% of women said they would feel less proud to work for an employer with a gender pay gap; and
  • 39% of men said they would feel less proud to work for an employer with a gender pay gap.

These percentages clearly demonstrate the influence that the gender pay gap has on recruitment and retention – both of which are critical to business success.

Increasing scrutiny

This year's reports will face increased scrutiny: Has progress been made in closing the gap? What active steps have been taken to meet last year's commitments? Your wider international workforce will be watching – as will your customers, investors and other stakeholders.

Pay risks impact businesses of all sizes and transcend the obligation to report on the gender pay gap. There is also increasing pressure for greater workplace pay transparency across all businesses - the government is currently consulting on a new ethnicity pay gap reporting requirement and has now also published a new voluntary framework to assist organisations with 250 staff or more to report how many of their staff have a health condition or disability.

Our Risk, Refine, Report solution

Our Risk, Refine, Report solution will provide you with insights on key risk areas for your business and a bespoke strategy with recommendations to tackle these – all in a legally privileged report.

The focus will be on minimising expensive and time-consuming legal claims, improving employee morale and productivity and protecting employee relations and your wider employer brand.

Increasing salaries may seem to be a simple solution but it is not without risk and the approach needs to be carefully managed. There are a wide variety of other steps that businesses can take to tackle their gender pay gaps and we will focus on your budget and culture in making recommendations.

Three steps to close the gap – how we do it

Our solution uses three steps:

  1. Risk asses: Consultation to assess risk profile, factoring in workforce demographic, pay structures, associated processes and complaints profile;
  2. Review and refine: We will review your key policies and procedures which impact upon gender pay (and pay equality) and propose improvements;
  3. Report and recommend: We will compile a legally privileged report on the risk profile of your business, and set out bespoke recommendations with suggested timeframes to protect the business and maximise on the opportunities.

Throughout, our focus is on minimising expensive legal claims, improving employee morale and productivity and protecting your wider employer brand.

In addition:

  • Option for integrated solution with Gapsquare: provided by Osborne Clarke and Gapsquare so that your business can act upon the insight provided by the data analysis for your workforce.
    • Gapsquare uses machine learning and artificial intelligence to help companies move towards a fair, engaged, and productive workforce of the future. Their flagship product Gapsquare FairPay is a leading provider of pay transparency, gender and ethnicity pay gap analysis. Their software provides instant insights into pay and wage equity, with in-built consultancy into the causes as well as data-driven recommendations for change.
    • Gapsquare's innovative technology uses machine learning and big data analysis combined with equality and diversity expertise. They simplify complex compensation structures to equip HR teams with the power to embed inclusive, data-led organisational solutions to their workforce ecosystem. The company’s co-founder and CEO Dr. Zara Nanu believes that technology can help us accelerate progress on pay disparities. Currently these issues are addressed through ad-hoc measures and we are using integrated and automated pay audits to transform the sector.
  • Report: We can also assist with the preparation of your gender pay report and the supporting narrative to ensure that the reported figures are put in the right context. We can provide a budget upon request.

Why take action now?

Taking action now will allow time to take steps to address the problem before you have to report on your business's gender pay gap. This should result in improved figures to report on and crucially will put you in a position to provide a more positive narrative as to the steps the business is taking to tackle the gender pay gap.

Adopting a proactive approach rather than waiting until the last minute to make changes will also present a more positive impression to your workforce.

Managing the global impact

For international businesses it will be key to factor in the international impact of gender pay for the wider business. Your wider international workforce, customers, investors and stakeholders are likely to take a keen interest in your organisation's gender pay profile.

It will be important to factor in the interest which European Works Counsels, Domestic Works Counsels and employee forums may have in your report on gender pay in the UK.

Turning risks into wins

Proactively addressing increasing calls for workplace transparency provides the impetus to turn risks into wins for your business.

We have also produced an infographic to help guide you through the process.

Get in touch with Martha Arnold or Julian Hemming at Osborne Clarke LLP to find out more.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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