11 Jan 2018

Our top tips for your gender pay gap report

If the ongoing media storm and backlash against the BBC has taught us anything, it’s that handling your gender pay gap reporting sensitively is important.

Justine Dixon, Strategy

This is more than a data compliance exercise. It’s a PR mine-field and can have far reaching consequences - from media attention, to employee disengagement, as well as potential legal implications.
Here at Superunion, we’ve been spending a lot of time thinking about how companies can better communicate this often-challenging message. And whilst we know that to some extent, there’s only so much you can say, we also know that saying something well is much better than saying it badly.

Before we share our thoughts – here’s a quick refresher on what the reporting requirements are:

By 4th April 2018, all UK employers with 250 or more employees are required to report their gender pay gap data, publishing the difference between hourly pay and bonuses received by male and female employees, alongside other gender-specific pay disclosures.

Here are our top 5 communications tips for gender pay gap (‘GPG’) reports:

1. Comply and communicate
The requirement for a report for every UK entity with 250 or more employees, means that some companies will have to disclose data for several legal entities. We’ve seen most large companies report and comment against an aggregated UK position (with most reporting for all UK employees, regardless of whether the regulations require this or not), and then to disclose the entity level data in a separate appendix. This helps to create a report that is cleaner, more accessible and understandable for all.

Where individual group companies have divergent results, we’ve seen some companies provide additional explanations for each entity. Diageo and Unilever are good examples of how to talk to UK-level results before providing explanations for the GPG of each separate entity.
Where it helps to tell the story, some companies are going further than just disclosing the information required by the regulations. Shell and Deloitte provide historic data to show that, over time, their proportions of females in senior roles have been increasing – demonstrating the progress that has been made so far.

2. Think about audience
Whilst this is a compliance exercise, your employees will be watching for this information with great interest. Bear in mind that some of your employees won’t understand the difference between mean and median, or the pay gap vs equal pay. Provide definitions, use infographics, and talk in simple language to help people understand the nature of any differences. Unilever’s report explains the definitions clearly using infographics, and benchmarks their result against the national average to put their results into context for readers.

3. Say something unique
Whilst it was always going to be unavoidable, most GPG narrative explanations aren’t telling us anything new – ‘there are more males than females at senior positions, and males are paid the same as females for the same work because that is a legal requirement’. Some companies are going a step further, in the spirit of the regulations, to help address the diversity issue and improve transparency. Recognising that ‘Diversity’ doesn’t just mean ‘Gender’, EY also publish an Ethnicity pay gap. PwC also provide an additional GPG figure to demonstrate that their gap falls significantly when you adjust for the higher proportion of males at senior levels (explaining that the remaining differences result from individual skill-set or time in role).

4. Strike the right tone
We’ve seen some varied responses to reports that contain contentious pay gap results – ranging from a brief explanation through to a more detailed and frank discussion. Whilst it won’t stop the media from picking up on a large gap, being authentic and honest about the fact that you have more work to do will help to build trust with your employees. Despite McKinsey’s fairly sizeable pay gap, their report explains to readers why they are convinced that gender parity is a business imperative, and that, whilst they have some way to go, they are working to understand and address these issues. They also have a video declaration from their UK Managing Partner, which helps to add credibility to these statements and show that the leadership team is engaging in this discussion.

Part of a thoughtful and engaging pay gap narrative is about helping people to understand not only why you are reporting this data, but also why it is strategically important to you as a business. We’ve seen some companies doing this, although not all, which is surprising. EY and McKinsey do this well, with McKinsey linking to various pieces of thought leadership they have written advocating diversity in the workplace.

5. Have a solid action plan
Telling us what you have done in the past may not be enough if you still have a gap. Readers will want to understand not only what you have done so far, but also what you are committing to do going forward to help tackle the issue. Disclosing a strategy, with targets and timeframes helps to provide credibility, demonstrating that your company is committed to finding a solution and willing to be held accountable for progress in the future. Aldermore have signed up to HM Treasury’s Women in Finance Charter, committing to have 30% female senior managers by 2020.

It’s still early days with regards to Gender Pay Gap reporting, and whilst we know it’s an uncomfortable task, we really do think it’s one worth getting right. With the April deadline fast approaching, and the vast majority of FTSE companies yet to report, we’ll be watching with keen interest to see how this reporting evolves.

We’ve been working with a number of our clients on the content and design of their gender pay gap reports. If you’d like to speak to us about how we can help your company, please contact: rachael.stackhouse@superunion.com.