People & Leadership

How to create a gender pay gap reporting strategy

Gender pay gap reporting is now mandatory for many companies. Learn how to develop a strategy to produce a gender pay gap report.

If your business is eligible, you need to adhere to gender pay gap reporting rules.

Currently, this only applies to companies with more than 250 employees. But by 2025, most Irish companies will be obliged to file an annual report (companies with more than 150 employees from 2024, and more than 50 from 2025).

Having a gender pay gap reporting strategy will make the task of fulfilling this requirement more feasible.

In this article, we’ll show you how to approach the compilation of a report in a strategic way.

It covers the following:

Compile your data

First things first, you need to compile the data. Detailed guidelines of how to do so are outlined on the government’s website.

In particular, you’re required to calculate the following for your company:

  • The differences between the mean and median hourly pay of male and female employees
  • The differences between the mean and median bonus pay of male and female employees
  • The differences between the mean and median pay of part-time male and female employees
  • The differences between the mean and median pay of employees on temporary contracts.

You also need to report the percentage of men and women who:

  • Received bonuses
  • Received benefits-in-kind
  • Are in the lower, lower-middle, upper-middle and upper range pay bands.

Get all your key stakeholders involved

The job of compiling the data is likely to be done by your HR and payroll department (although feel free to choose the team best suited for this role).

But while it may be relatively straightforward to do that, the key is understanding the story behind the figures.

But while one team does the maths, the underlying reasons for the figures should be discussed within your company as a whole.

It’s imperative that as many stakeholders as possible are given the opportunity to analyse the figures and give their perspectives, be it department heads, union officials, supervisors or board members.

Understand the ‘why’ of a gender pay gap

By including all stakeholders, you should be able to better understand the reasons behind a gender pay gap.

Also, Ireland is a relative latecomer to gender pay gap reporting and can therefore learn from lessons in other jurisdictions.

The UK, for example, started gender pay gap reporting in 2017. However, it’s not compulsory for UK companies to explain why there is a gap and what they intend to do to close it. While UK authorities recommend including a narrative and also an action plan, it is discretionary.

Irish regulations go further and require a gap to be explained and a subsequent plan of action to also be outlined.

The narrative explaining the gap needs to be clear and concise, as well as honest about the reasons for a gap.

Even if there’s a significant gender pay gap, as long as the narrative is well thought out, it should reassure your employees, potential employees and other stakeholders that your company is committed to closing the gap and eliminating any unfairness.

You can also emphasize that this will take time.

The reasons for a pay gap are often complicated and may also potentially be impacted by external influences. Common reasons are that women are more likely to work part time or take career breaks due to having children.

Also, women continue to have more responsibility in terms of housework and elder care. Factors such as these mean men often progress further in a company and subsequently hold more senior roles. And as a consequence, they’re paid more.

In addition, sectors dominated by women often have lower pay, are more precarious and offer fewer opportunities for advancement.

Conversely, women are often underrepresented in well-paid sectors such as science, technology and engineering, though their representation in these sectors is increasing each year.

In terms of your own business, you should also examine where your company fits in relation to other companies in your sector and determine whether other considerations such as redundancies have impacted the figures.

Decide on a clear action plan

When working on an action plan, these actions should be specific, meaningful and measurable. If the plan is vague, it could attract unwarranted attention to your company and potentially lead to broader scrutiny.

Measures to introduce as part of the plan could include:

  • Examining recruitment processes to ensure there’s no unconscious bias
  • Designing talent development programmes that encourage women to progress
  • Setting up mentoring programmes
  • Offering more family friendly working conditions.

Devise a communications strategy

You should design a communications strategy on how to present the data, both within the company and also to external stakeholders.

In the first instance, it’s vital to ensure employees are informed and clear about what actions are going to be taken.

They’re inevitably going to discuss the findings among themselves, so it’s important to be transparent and encourage them to ask questions about any concerns they may have.

If internal communications aren’t handled correctly, it could impact your company’s morale and potentially make it harder to recruit in the future.

Then, in terms of the overall communications strategy, you need to know your various audiences, as well as the key message that will be important to each one. You’ll also need to decide on the channels of communications, as well as when you’ll communicate to each audience.

Lastly, you should anticipate how you’ll respond to any adverse reactions.

One business that’s ahead of the game

Certain Irish companies have been reporting gender pay gap statistics for several years. For example, An Post just published its fourth annual pay gap report and for the second year in a row, the pay gap is 0%.

An Post has embraced pay gap reporting as a positive tool and has used it to drive change within the organisation.

Each year, much fanfare accompanies the publication of the results, and in 2022, a video was produced featuring entrepreneur Sonya Lennon talking to key stakeholders about how the company has managed to close the gap.

As Eleanor Nash, chief people officer at An Post, explains, CEO David McRedmond has driven this transformation and sees gender pay gap reporting as a way to improve the representation of women and other minorities across the business.

When David joined An Post in 2016, the board comprised only men. Today, it’s evenly split between men and women. And in addition, 41% of senior management roles are held by women.

An Post has closed its gap through a combination of initiatives.

There are 50:50 shortlists for senior management roles and it uses special software to remove any gender bias from job descriptions.

The company has also set up a female talent programme called Aspire, from which 19% of its participants have moved jobs within An Post since completing the programme and 74% have gone on to further education.

There’s a mentoring programme called Elevate, too.

To date, much of the focus has been on management roles. Looking ahead, An Post aims to increase representation of women among frontline postal sorting, collection and delivery staff, where currently only 13% of staff are women.

Eleanor says: “We have to be as diverse as the community we serve. That’s what we stand for.

“For us, it’s about our customers seeing a diverse talent of people in our organisation that reflects Ireland today, We also need women to come through the organisation for succession.”

Actions proposed include redesigning the recruitment process for postal operatives and training operational managers on inclusive recruitment.

In terms of how other companies should approach pay gap reporting, Eleanor says: “I think it should be seen as a positive.

“I also think there’s sometimes a tendency to do the report and don’t worry about it. But there is a requirement to have an action plan and to measure the results of that action plan.

“Understand the data, spend time looking at it, and whether the gap is big or small, there are still actions you can take and it is a journey.

“This is a long-term plan for us. The actions are what matters.”

Final thoughts on a gender pay gap reporting strategy

Your company should approach gender pay gap reporting as a worthwhile exercise and not just a compliance one.

To do this, you need to form a strategy to understand the data and address the structural issues within your company that are leading to inequalities, if any.

In the long run, this will benefit your business, as the more diverse your workforce is across all levels, the more successful your company will be.