Mind the gender pay gap

With the first year of gender pay gap reporting out of the way, you might feel that the biggest challenge is behind you. Rather than being a one-off exercise, however, the key focus of the disclosures is how you are progressing in closing the gap and show how you compare against your peers. That’s why the bigger test is the second year (2018-19) and those thereafter, as your business comes under pressure to show what you’re doing to close the gap and demonstrate progress. How can you ensure you’re ready?

April 2018’s deadline for the first year of gender pay disclosure was met with a flurry of last minute-reporting and a ramping up of the media scrutiny.

By reporting early and disclosing more than the statutory minimum, the front runners were able to demonstrate their commitment to gender equality and spotlight their plans for achieving it, even if their results may have showed that considerable work is needed.

Facing both logistical and reputational challenges, some of the last-minute reporters either found themselves overwhelmed by how much information they had to deal with as the deadline loomed or may even have hoped to hide in the crowd. Those that have yet to publish now face possible fines and reputational damage.

Sector snapshot

The results for hospitality, travel and leisure (HTL) reflect the distinctive nature of these sectors and longstanding pay challenges within them.

Our analysis shows that the median gender pay gaps for hospitality (7%) and leisure (10%) were lower than UK businesses as a whole (14%). However, there continues to be far more men than women in senior and technical roles and far more women in lower paid and unskilled positions. These are also sectors with high staff turnover and a high prevalence of insecure seasonal work.

The median gender pay gap for travel (22%) was higher than the economy as a whole. A key driver is the under-representation of women in senior positions and technical posts such as airline pilots. The demands of the sector also put pressure on work-life balance and make it hard for people with caring responsibilities.

Powerful differentiator

Many forward-looking HTL businesses are taking active steps to tackle the gender pay gap and underlying issues within hiring, career progression and diversity and inclusion. The results can not only help to boost recruitment and retention, but also attract customers’ loyalty, many of whom are the friends or family of employees.

The new diversity in hospitality, travel and leisure charter can help to strengthen strategic impetus, transparency and accountability. Key commitments include augmenting gender pay reporting with an explanation of the causes and actions to address them.

Pressing deadlines

The second year of gender pay reporting looks set to attract even greater scrutiny and comparison.

The challenges are compounded by the fact that the period of time you’re reporting on ends one year before the April 2019 deadline. If you were an early reporter and have seen a positive movement thereafter, you may well want to disclose this as soon as possible. By contrast, if you reported in the final wave first time round, you will have had less time to make a difference to the 2018-19 result and determine whether it’s good or bad. However, the reputational differentiator isn’t just the size of the pay gap, but the steps you’re taking to close it. It is important to begin developing strategies and surrounding communication plans.

Further challenges stem from the potential for further disclosure requirements. These include gender pay reporting in other countries and the possible need to report on pay gaps for Black, Asian and Minority Ethnic (BAME) employees.

On the front foot

So how can your business ensure it’s equipped to meet the challenges ahead?

1. Plan for next year’s reporting now

Understand what your reported pay gap will be for 2018-19 and start communication planning now. If it’s wider than the previous year, how can you best explain and address this?

2. Revisit equal pay and prepare for future compliance

Ensure you have the reporting and governance in place to monitor your equal pay risks and prepare for any new reporting requirements, in the UK and around the world.

3. Review your pay governance

Examine your existing job architecture and pay structures to ensure you have the mechanisms in place to close the gender pay gap and drive pay fairness more broadly.

4. Take action and close the gap

Build a robust and detailed action plan to make the changes to improve the diversity of your organisation and support inclusion. How could you bring more women into technical and senior roles, for example? Ensure your action plan is led by the business and underpinned by robust data, specific KPIs and strong HR policies and processes.

Living up to your promises

Taking the initiative in this way can help your business to turn gender pay reporting from a reputational risk to an opportunity to strengthen your commercial and employer brand – a magnet for talent. The challenge is to turn words into actions by identifying and tackling the root causes of pay inequality and ensuring women can realise their full potential within your organisation.

This blog was first published on PwC’s website