Third of firms concerned unexplained gender pay figures could damage their reputation

While a third of companies have already completed their gender pay gap reports, many remain reluctant to publish the figures; and a majority (70 percent) want to include an explanatory narrative to help support their findings. According to the new survey by Mercer, although perceptions of the regulations have improved since being made final, companies find the regulations complex (41 percent), confusing (29 percent) and misleading (28 percent). The result is, while a third of companies completed their analysis at the end of May, most (44 percent) plan on leaving it to later in the year (Oct 2017-Jan 2018) to report; and 28 percent don’t know when they will report. When looking for root causes of the pay gaps, 54 percent of respondents have conducted some sort of analysis (e.g. equal pay audits and bonus programme analysis) in the last three years. Looking ahead there is a dramatic change in the attention being given by organisations to actions beyond pay, and some leading organisations are addressing this issue already.

For example, 25 percent of organisations have analysed data on female promotions already with a further 30 percent intending to do this; 25 percent have set goals for female representation with a further 19 percent intending to do this; 36 percent have already trained managers in unconscious bias with a further 20 percent intending to do this.

“Although committed to the principle of reporting many UK companies feel the figures will show an overly simplistic view and so see a need to explain further to their staff and shareholders”, said Chris Charman, Principal and Reward expert at Mercer.

“Many companies are concerned about the risk of reputational damage when publishing their figures, especially as there still seems to be much confusion between the Gender Pay Gap and the legal requirement of equal pay for equal work.

“Most organisations are focused on getting to grips with the figures and developing a narrative to explain. Leading organisations are well advised to think about how they can be looking ahead in order to be making improvements in future years.  At the heart of this is looking at root causes, which can be found in pay, female promotion and the jobs that men and women predominate in.”

“Those companies who focus solely on compliance will have a hard time closing the gap,” said Mr Charman. “From our own research we see that to make progress on closing the Gender Pay Gap requires fair pay programmes, equal pay monitoring and corrective action, a strong focus on female progression and gender parity, as well as attention to the broader diversity and inclusion programme.”

Mercer’s Gender Pay Gap Reporting Survey provides insights from HR and reward professionals on their perceptions, reactions, concerns and plans surrounding the legislation. Mercer received responses from 165 UK companies, of which 29 percent were from the FTSE250, representing a market capitalisation of more than £449bn.