You could be fooled in to thinking there would be no real news on the gender pay gap until the April reporting deadline. But, you’d be wrong.
Last week’s news that Mrs May was paying new adviser Robbie Gibb £15,000 more than previous incumbent Katie Perrier, despite pledges to close her gender pay gap was interesting for two reasons. Firstly, it highlighted the frequent conflation in media reports and even by senior politicians, who should know better, of unequal pay (already illegal) and the gender pay gap. Secondly it begs the question, if the Government can’t get it right, will anyone else?
Of the 11 Government Departments that have published their gender pay statistics on the portal so far, women did better on average in just one, Health, which reported an inverse pay gap of 14.2%. For the other 10, women’s average hourly pay rates are lower, the worst being the Department for Transport (16.9%), closely followed by the Department for Exiting the European Union (15.3%) and the Department for Business, Energy and Industrial Strategy (12%) - all worse than the national full time average 9.1% (although you can never be quite sure if those are apples or pears your are looking at!)
The trouble with "lies, damn lies and statistics" is illustrated by this recent FT investigation, which put 16 companies, including Hugo Boss, under the spotlight. The 16 have altered their official gender pay data submission three times since first reporting. Initially each of these companies claimed they had no gender pay gap whatsoever. As Personnel today points out - this is statistically improbable, if not impossible - so, it is no great surprise they had to go back and check their facts.
As all of those grappling with reporting will know, employers are legally liable for the data they publish, so the information must be accurate. The Department for Education, which is responsible for the pay gap portal, said it wouldn’t be checking the data, leaving it to media scrutiny to keep companies honest. However, the Equality and Human Rights Commission, the regulatory body responsible for enforcing the Equality Act 2010, has now made it clear they will be investigating the data.
As senior individuals at Hugo Boss are now painfully aware, going from 0% pay gap to a 32.6% pay gap, doesn’t exactly reflect well on reputation.
Talking of senior individuals, top company spokespeople will be on the frontline, and so need to be able to understand and speak about your pay gap numbers compellingly. Nicky Morgan, Chair of the Treasury Select Committee, warned a leading financial services conference audience last month that if coming before her, they should also prepare to be asked about their pay gap. And she's not the only one.
On Tuesday December 19th, the Business, Energy and Industrial Strategy Committee questioned leading energy providers energy price cap policy. Although their inquiry is unrelated to the gender pay gap, it didn’t stop them asking Stephen Forbes, CCO of SSE, what his gap was? He didn’t have the answer. The Committee’s question sought to decipher whether financial favourability towards men was also present in the prices their customers were paying. In Mr Forbes’ defence, when given SSE’s figure, he did at least understand why it was high (19.4%) and offered explanation. The Committee members on the other hand, apparently mistook the number for unequal pay, insisting what he was saying was inexcusable.
In fact, there are plenty of understandable reasons why any organisation might have a gender pay gap. The challenge all companies with more than 250 employees now face, is putting their numbers into context and explaining their plans to address the gap.
Conflation is a common mistake and, as we have seen, one that politicians and journalists don’t understand as well as one might hope. Still not sure of the difference yourself? Have a look at the EHRC's helpful explainer.
To mitigate the risk of this affecting your reputation, our top tips are:
- Start with your staff: How will they react to the publication? Will they understand the difference between the gender pay gap and equal pay? Have you equipped your managers with talking points and Q&A so that they can deal with the questions that will naturally arise? Can your staff help explain why the gaps are there and help you develop a plan to fix it?
- One practical tip is to suggest your spokespeople and male executives should take the results home to explain to their daughters in order to really get to grips with the messaging challenge.
- Develop a plan: Knowing what the numbers are, what do you plan to do to shift those numbers? In year one, comparisons will be between you and your industry peers, but in year two the media reporting is more likely to focus on whether numbers are going in the right direction or not.
- The sooner you start gathering together best practice policies and positive case studies to illustrate your efforts, the better.
- Set a comms objective: Is this just about risk mitigation or do you have a more ambitious positive story to tell? Do the numbers highlight a potential legal risk from equal pay claims?
- Can you quantify and categorise the reputation risk and prepare Q&A in advance?
- Do you need to take first mover advantage in order to get more space in media to put your numbers into context or are you happier being just one number in a crowd?
- Prepare your narrative: Once you know how your staff might react, when are you going to tell internal audiences, customers and media? Is anyone else in your space already communicating? What sector benchmarks are there?
- What images or infographics do you need to support the narrative. We have been building a database of case studies looking at how different organisations pay gap narratives are reported.
- There are some good example narratives now up on the Government portal including TSB, Virgin Media, Virgin Money, FDM, and the Children’s Society
The scale of your challenge depends on what your pay gap number crunching reveals, and every business has a different story to tell. What you chose to do with the information beyond compliance will determine the scale of the challenge you face before the end of March.
Do get in touch if you would like help preparing your plan for the April reporting deadline. We can help you bring together the right internal stakeholders, prepare for the reputation risk and the capitalise on potential opportunities it presents.