Nikki Duncan
Posted on 5 Jun 2017

What are the reputational risks around the new gender pay reporting regulations?

Organisations with 250+ employees (where 'employees' includes both casual and other workers/consultants providing personal service) are required to compute detailed gender pay comparison calculations, as at 5 April 2017, and later publicise their gender pay gap stats.

This may have been considered by many as a low priority, vis-à-vis more pressing matters such as managing the challenging exchange rates in overseas supply chains. However, the new Gender Pay Reporting Regulations carry hidden potential longer-term risks, and therefore should be more than a 'tick box' exercise.

Employers first need to decide when and how to publicise the calculations, and how they tackle the recommended 'supporting statement', to comment on any unhelpful gender pay gap the pay stats highlight. The longstop date for publication is 4 April 2018, and the information needs to be confirmed by an 'appropriate person' (eg the CEO) and published on both the Companies, and a Government, websites. Breach of this requirement risks being featured in the 'name and shame' tables which the Government are increasingly using to bring 'rogue employers' into line.

The main hidden risk is the accelerating demographic changes, with a shrinking talent pool, which will inevitably further-exacerbate the current skills shortages issues for manufacturers. As a result, prospective employees are likely to take greater notice of factors such as gender pay discrepancy, and also the employer's attitude to such issues, as revealed in their 'supporting statement'. 

More positively, the required pay gap analysis, to produce that statement, provides a great opportunity to both address any unexplained gender pay discrepancies, and also then provide the best spin on the Companies values, and plans to address any unhelpful statistics which might otherwise affect recruitment/retention down the line. There is helpful online guidance from ACAS, on both the detail of the required, complex, number-crunching, but also on how best to analyse & address the results.

This is therefore a topic which should be high on the agenda of your HR team, with strategic input on how the Company wishes to position itself so that it is best-placed to fish for talent in the shrinking talent pool.