Organisations are encouraged to produce a narrative report explaining why there are any gaps and what they plan to do to reduce them. The onus is very much on organisations to implement policies that will have a positive effect in reducing the difference between what men and women are paid on average. Any organisations that should but do not publish a report can be forced to do so by the Equalities and Human Rights Commission (ECHR): failure to do so can lead to an organisation being found in contempt of court and face an unlimited fine. The ECHR has yet to take such drastic action but it is naming and shaming organisations that have failed to report. All reports musts be published (prominently) on the organisation’s website and on a government website: hiding the figures will not be possible.

The first year’s reports for 2018 made it clear that there were gender pay gaps across all sectors of the economy. In 2019 it was encouraging to see that the median gender pay gap had reduced overall but only very slightly - from 9.7% to 9.6%. Less encouraging was the fact that fewer than half of employers had reduced their gap and for many the gap had actually increased. Furthermore 78% of all the companies that reported still had a gender pay gap in favour of men, compared to 14% with a pay gap in favour of women.

Whilst it is true that there are more men employed at senior levels across all sectors it is not the case that where women are employed at a similarly senior level they are paid less than men. The figures also reveal that part time workers irrespective of their gender, tend to earn less than their full –time equivalents. Whilst in the lower paid sectors of the economy, such as the retail or the care industries, all employees, even the most senior, are paid a relatively low hourly rate, when compared to higher paid sectors such as banking. This also means that the lower paid sectors of the economy tend to report smaller gaps but this is just a reflection of low pay overall not gender equality.

There is an increasing body of evidence to suggest that more diverse work forces lead to increases in productivity and profit. This, coupled with the requirement that the gender pay gap figures must be signed off by a senior member of staff, such as a director, to confirm their accuracy, mean that all of senior management should take the issue seriously. Preparing the reports can be very time consuming, as who and what to include is not straightforward. Yet with the figures being in public domain it is not something that should be rushed or glossed over. Reporting must be handled carefully, to manage the risk of reputational damage and the potential impact on an organisation’s employees and customers.

With this in mind ICAEW has produced a series of guides on what the regulations mean, why you should care about mending the gender pay gap and ideas on what works and what doesn’t. We plan to produce further guidance on what works as more evidence becomes available.

These and links to guidance produced by the government, ACAS, EHRC are all available here:

• Gender Pay Gap Reporting – impact on ICAEW members

Jane Berney
Manager, Business and Law
ICAEW