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Pay gap reporting is failing women as pay gap widens

Today is Equal Pay Day, the date calculated by the Fawcett Society that marks the point in the year where women (on average), stop earning relative to men because of the gender pay gap.

And thanks to the gender pay gap rising from 10.6% to 11.9% between 2020-21, Equal Pay Day actually arrives two days earlier than last year.

As such many now argue it proves statutory gender reporting for firms over 250 staff is failing to make any long-lasting change.


Why pay gap reporting is failing to make a difference:

UK's largest occupations driving gender pay gap

Pay gap reporting isn’t perfect, but greater transparency is necessary

Thousands of organisations opt out of gender pay gap reporting

Speaking to HR magazine, business transformation expert and author of Too Proud to Lead, Rita Trehan, said: “My problem with gender pay reporting is that often it’s reporting for reporting’s sake – and more about making companies feel more comfortable about the issue than they really ought to be.

“Smart people are crunching numbers, but my angst is that they’re not then getting to the root cause of why the numbers are what they are. On its own a report doesn't address questions like 'what’s stopping women apply to certain roles?'”

According to Teresa Boughey, CEO of Jungle HR, her own research supports this view. “We asked companies whether they share any actual diversity actions plans as a result of their gender pay reporting, and only 25% of organisations said yes, while 60% said no.”

She said: “While it's true that ‘what gets measured gets managed’, and that some form of public declaration of pay rates will often be a catalyst for change – my feeling is that we’ve already had the ugly truth revealed in the first reports three years ago, but there’s still no change several reports later."

She added: “The data clearly shows the gender gap is widening. I also think relaxing of the deadline for the latest figures – due to the pandemic – was seen as an opportunity for many firms to take their focus off inclusion and diversity.”

Ann Limb, chair of City & Guilds, highlights that reporting alone often doesn’t change the systemic issues that many companies have. For instance, its research had found 37% of women have received no formal workplace training in the last three years, rising to 59% in the past year.

Limb told HR magazine: “The data might be there, but action isn’t always following. I say let’s see the evidence that organisations are actually changing things – like their stance towards learning and development – the lack of which disproportionately impacts women.”

But at one organisation, Canadian-based tech firm, Unbounce, which did have unequal pay, and its HRD Leslie Collin argues reporting can be the necessary first step to institutional change.

She said: “We realised the experience for our women was different from men, and it was embarrassing to find out we didn’t know if we had pay equity. When we did the number crunching we found out there were cases of unequal pay, and we rectified them.”

Canada doesn't have statutory reporting, but so useful was the reporting that Leslie claims it got the business to realise its “systemic barriers”, and it now has its own ‘Pay Up for Progress’ initiative, where other companies in its sector pledge equal pay and share best practice for achieving it.

But whether more firms will now step up is a moot point for many.

The Equal Pay Act was passed 50 years ago, yet in many ways it feels like very little progress has been made,” argues Dr Zara Nanu, CEO and Co-Founder, Gapsquare. “If we're going to close this gap, businesses need to ensure women receive better opportunities and start tackling gender inequality from a new angle.”

Trehan added: “Rather than pay reporting creating a ‘yes we know’ response, it needs real action. If gender pay really is so important, it should be talked about at every board meeting, and not just once a year when the report comes out.”