By Charles Cotton, Reward Adviser at the CIPD.
The COVID-19 outbreak is putting employers, employees and HR departments under incredible and unprecedented pressure. In light of which, it’s not too surprising that the Government Equalities Office (GEO) and the Equality and Human Rights Commission (EHRC), have suspended enforcement of the gender pay gap deadlines for this reporting year. While we think this is a sensible move, we want employers to consider this as a delay, not a cancellation of reporting.
We think it’s sensible because it would have been difficult to chase employers for the late submission of their figures when these same organisations are having to meet various challenges, such as jobs cuts, remote working, trying to remain in business and supporting colleagues who, either themselves or their loved ones, have been hit by the virus.
While most HR teams will have generated the figures needed months ago (after all, the reports due now are based on data from a snapshot date last April), some may still be developing their communication strategy or waiting for approval from colleagues before they can submit the data to the Gender Pay Gap online reporting service.
Some of these colleagues may have been suddenly pulled into urgent projects to support staff and adapt business operations in response to the coronavirus, while others may be off on sick leave. However, I would expect that as things start to settle down, more employers will be in a position to submit their reports. Some employers have continued reporting regardless; since 4 March when UK cases of the virus first began to surge, almost 1,900 employers have done so (figure accurate as of 26 March).
But why should anyone report if there’ll be no sanctions for failing to do so? While the stick of legislation has gone, there is still the stick that other stakeholders will wield if they see employers dodging what they see as an important way of demonstrating the organisation’s commitment to its people and fair work practices. For instance, some people’s decisions to buy your goods or services or to invest in your firm (or not) will be influenced by how you are responding to this crisis – from how you are treating your people to the priority that you are giving to diversity and inclusion, for example through publishing your gender pay gap figures.
As previous CIPD blogs have emphasised, it’s not just reporting the figures that matters. A gender pay gap narrative and action plan will help you explain any pay gaps and what you intend to do about them. Without this supporting information, you won’t be able to demonstrate that you are taking the issue of gender equality seriously and without them your employees and other external stakeholders won’t be able to judge your efforts. Ultimately, you won’t be able to take an evidence-based approach to addressing your gap unless you understand its causes. So, it’s important that you produce these as well, as soon as time allows.
As well as the sticks, there also the carrots. As I said, publishing your gender pay gap is one way of demonstrating that you are committed to ensuring that all your people practices, not just reward, are fair. This will help your employer brand, but also your reputation with your clients, suppliers and investors. Such advantages should help with your bottom line, such as employee turnover, productivity or innovation. You can make the same arguments about ethnicity pay reporting as well, so HR should still continue preparing their organisation for its introduction, that way when it’s finally brought in, your firm will be ready.
To a certain extent, publishing your gender pay data for 2019 is relatively straight forward for most employers (especially with the help of our guide) and we would expect most to do so. At the time of writing, 3,528 employers have already submitted their data for 2019, and the government portal will stay open so that employers can submit their data after the deadlines should they need to. And if you submit your data after your deadline, there’ll be no ‘late’ flag against your organisation’s report on the portal.
Another advantage of publishing your 2019 figures is so that you can easily compare them with your 2020 figures. Cuts to jobs and pay in response to the economic and health emergency could have an impact on your 2020 gender pay gap figures. By having the 2019 data readily available, you’ll be better able to explain what has driven any increase or decrease in your gap – this would be difficult to do without year-on-year figures.
The pay data for next year’s reporting, which will use the 2020 snapshot date, could be very different due to COVID-19. For instance, the loss of jobs among lower paid women could reduce the headline gender pay gap figures. Similarly, if women are receiving less than their full pay, for whatever reason – for example if they are disproportionately taking on extra caring responsibilities, they would not be included in the gender pay calculations. The Government could, of course, consider moving the snapshot date for 2020 reports back a month to early March, before the crisis began to have a big impact on employment in the UK, so that employers could give a truer, undistorted picture of the gender pay gap. But there are of course, arguments for and against this approach – for instance, many payroll and HR systems have been set to collect and analyse data automatically on the snapshot date, so changing the date now could cause an extra headache for teams that are already stretched.
Whatever approach we take to gender pay gap reporting in future, it’s more important now than ever to keep our eye on the ball. Women stand to be disproportionately affected by the economic impacts of the virus (because they are over-represented in sectors like retail and hospitality) and so we need to take any narrowing of the pay gap in the coming years with a pinch of salt – it could be an indirect result of the impending economic crisis rather than a sign of improved gender equality.
