By Charles Cotton, CIPD senior adviser for Reward and Performance.

There are just two weeks to go before employers must disclose their gender pay gap data (31 March for the public sector and 4 April for the private sector). To date, while around 2,400 employers have already submitted their figures, about 8,500 are busy getting their data ready to publish. 

For HR professionals working for an organisation that’s just starting to analyse their figures, my previous blog and the CIPD’s six simple steps  will help you understand what you need to report, when and how. 

While not required by regulation, an employer has the option to publish a narrative to accompany their gender pay gap data and we recommend doing so. And most organisations seem to agree. Of the employers that have disclosed their gender pay gap data on the government reporting website over the past three years, to date 79% have supplied a link giving additional information of some kind, ranging from a brief clarification to a full narrative.  

People looking at the Government’s gender pay gap viewing service will be able to see this extra information through the link: “What this employer says about their gender pay gap”. For instance, this is what individuals can see when they look at the CIPD’s gender pay gap report for the year 2019/20. 

Why publish a narrative when you don’t need to?

As our gender pay gap reporting guide points out: While the quantitative measures in gender pay gap reporting help to reveal the scale of the male/female earnings differential, they do little to explain the context and causes. Nor do they indicate any actions you have already been taking or are planning with a view to closing these gaps. The figures also only indicate the current situation, rather than what you intend to do in the future.  

There’s an opportunity for HR teams to show their value for the organisation by creating a narrative to address queries and concerns from its various internal and external stakeholders, such as investors, employees, the remuneration committee, clients, etc.  

For instance, some employees may be shocked by just how wide the gender pay gaps are, and some individuals may even be put off from applying for jobs with your organisation. By having a narrative, which explains why the gaps are as a large as they are and what the organisation is doing in response, this will help reduce employee worries and help you enhance your firm’s brand among its customers, investors and workers. 

Another example is to explain why your gender pay gap may have increased over the past few years. This could be a consequence of your actions to attract more women to certain roles within your organisation, such as technical apprenticeships. Because these new women will begin their work at the start of your pay grades, these new staff could bring down the overall mean and median pay rates for your female workforce. However, over time, as these individuals progress within your organisation, then the overall mean and median pay rates for your female workforce will increase and the gender pay differentials will fall. Your narrative is an opportunity to explain why things may get worse before they improve.

What should a good narrative include? 

A gender pay narrative is your chance to: 

• describe your employer’s organisational context 
• explain the gender pay gap calculations and draw comparisons with previous years’ figures 

• explain as far as possible the causes of any gender pay differentials shown by the data  
• explain what actions have been taken or are planned to address significant gaps (your action plan) 
• describe how employees and employee representatives are being involved in your action plan.  

If you are writing a narrative for the first time, possibly because your organisation is now large enough to be covered by the legislation, it is important to point out the difference to your employees between the gender pay gap and equal pay. They are different but are often confused.  

ACAS defines equal pay as: the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value. It points out that it: is unlawful to pay people unequally because they are a man or a woman. 

ACAS explains the gender pay gap as: the difference in the average pay between all men and women in a workforce. If a workforce has a particularly high gender pay gap, this can indicate there may be a number of issues to deal with, and the individual calculations may help to identify what those issues are. 

If you are new to narrative writing or even if you have produced one previously, it’s important to stress that having a significant gender pay gap doesn’t necessarily mean that you’re paying men and women differently for doing comparable work. Carrying out an equal pay audit will help you check whether any pay gaps that exists are objectively justifiable; for instance, the difference may be related to the use of location allowances. 

If you’ve conducted an equal pay audit, or have plans to do so, then you should flag this in your narrative. You should also describe any other initiatives that you may have taken as part of your action plan, such as a gender review of your recruitment and selection practices or plans to assess the gender impact of your approach to learning and development.

While the regulations don’t require you to publish an action plan, or even to draw one up, the Government encourages you to do so, as does the CIPD. In addition to helping you tackle the gender pay gap itself, drawing up an action plan will help you to answer questions about what you are doing. Action plans are increasingly being called for by politicians, by campaigners, and by the public, and it would be sensible to prepare to engage with these demands. 

How should you create a pay narrative? 

A pay narrative should be part of your overall gender pay gap communication plan, which will cover such issues as messaging, audiences, sequencing and risk management. We’ll cover this in more detail in next week’s blog post, but if you can’t wait then check out our guide.  

If you’re looking for inspiration, it may help you to look at what other employers have produced, in terms of layout, language and graphics. We suggest looking at narratives from employers of different sizes and sectors for ideas. For instance, your narrative could be a podcast, a video or an infographic.  

You should create a timetable of who does what and by when, and possibly think about involving colleagues with expertise in creating the narrative, such as marketing, communications or public affairs. You should also think about who will have sign-off over the document and at what stage in the process should the board - or equivalent - be involved.

You must also plan for possible events that could impact on the production of your narrative and the disclosure of your data. For instance, how will you report if some of your people are off from work due to the coronavirus? 

With just two weeks to go 

If you’re reporting for the first time, you should make the case to your organisation for publishing a narrative. If you’ve been producing one for the past couple of years, now’s the chance to review what you’ve produced to see if this year’s narrative can be further improved. In both scenarios think about how your narrative demonstrates your employer’s commitment to: 

• a fair and inclusive organisation – good for attraction and retention 
• knowing your workforce better and finding opportunities to improve diversity and inclusion in order to boost business performance in a sustainable way 
• improving the experience of your employees 

• discussing people matters at board level. 

For more help on this, or other issues related to gender pay gap reporting, please visit our gender pay gap reporting guide and continue to follow our countdown to the reporting deadline on Twitter, LinkedIn and Facebook.