Are we still minding the Gender Pay Gap?

By Rima Sacre, Associate Director 

It is easy to forget in this new reality that there are things going on around us. Not just everyday things, but key priorities that used to dominate the business agenda for companies.

A few weeks ago, saw the third (albeit arbitrary) annual deadline for UK businesses to report their Gender Pay Gap (GPG) figures. With the ongoing COVID-19 crisis, it is understandable that the Government announced a suspension to the deadline, removing any expectation on employers to report their data.

While the news to suspend this year’s deadline was broadly well received by businesses, industry groups and employees, I was personally very pleased to see that nearly half of UK businesses, 5,068 companies to be exact, went ahead and reported their 2019 GPG figures as planned.

Was reporting the right decision?

By all accounts, we at FHF believe it was.

The annual GPG reporting process reviews figures based on the UK Government requirements, indicating where progress has been made over the past year. And while many businesses don’t necessarily agree with the required methodology, it provides an annual opportunity for businesses to cement their commitment to the equality of women in the workplace, and more broadly to diversity & inclusion.

With that in mind, it is our view that employees are the primary and most important audience for any business’ GPG reporting. A commitment to share numbers, whether improved or not, and a chance to re-iterate business plans to close the pay gap, remain crucial to employees.

Looking at some of our recent research on UK consumer expectations of businesses, we found that the way in which a company takes care of its employees is the number one driver of reputation. What’s more, over half of people say the COVID-19 crisis will change their future purchasing behaviour, and 42% say they intend to buy from companies that took care of their employees during the crisis. We understand that caring for employees in a time of crisis and a business’ broader employee programmes are not one and the same. However, we believe that the scrutiny businesses are facing now regarding how they support and communicate with employees will seep into areas like GPG reporting. There is undoubtedly a heightened – and growing – awareness of the employer-employee dynamic.

If a business therefore is truly committed to attaining gender equality, maintaining transparency and being an employer of choice, reporting GPG data remains the right thing to do – with or without a deadline.

What about next year?

We have yet to hear any guidance from the UK Government on the 2021 GPG reporting deadline. What we do know however, is that the Government is due to review GPG reporting regulations by 2022 and intends to consult on any changes to the information employers must provide by the end of 2021.

The educated guess we are sharing with our clients, is that the GPG reporting requirement will stand firm next year and is set to be more important than ever.

While COVID-19 has created a temporary distraction, the GPG continues to be of interest to the media and stakeholders, with more than 350 articles generated over the course of the last three weeks alone. And not long before COVID-19 spread across the globe, there was growing cross-party consensus, particularly amongst women Members of Parliament, that reporting requirements needed to go further. The EU launched its Gender Equality Strategy setting key actions to tackle equality over the next five years, and Brussels committed to requiring gender neutral boardrooms – split 50/50 women and men – as part of the bloc’s sweeping equality reforms.

Given all of this, it is very unlikely that the GPG will disappear.

Quite the opposite in fact: Given the lack of focus on the GPG this year, we sense that next year may drive an increased scrutiny of companies. We would recommend that businesses be prepared – not just in their reporting, but in their communication strategy. This will be especially true for the businesses that chose not to report this year; alongside two years’ worth of time to account for, there will be another layer of explanation required.