- 62% of organisations who are not required to report their gender pay gap, being under the 250 headcount, still choose to report voluntarily according to Barnett Waddingham’s new employer survey - demonstrating the level of value seen in reporting
- Of those who report, 52% say their efforts have reduced the gap
- Melissa Blissett, Senior Consultant at Barnett Waddingham, calls for the Government to bring in ethnicity and disability pay gap reporting legislation to help tackle inequality
Ahead of the forthcoming gender pay gap reporting deadlines*, new research from Barnett Waddingham shows this legislation is making a significant impact on pay inequalities. So couldn’t the ethnicity pay gap be tackled in the same way?
Only businesses with 250 or more employees are currently obliged to report their gender pay gap, but the legislation appears to be influencing behaviour in the wider business community with just over 6 in 10 organisations now choosing to report voluntarily. And this seems to be paying off, with 52% claiming their efforts have reduced the pay gap. So, if gender pay gap reporting shows measurement can enable action, why has the Government not yet legislated ethnicity pay gap reporting?
But while the Government hesitates, the business community may already be taking matters into their own hands. 36% of businesses sampled already choose to report ethnicity pay gaps, and a further 30% plan to do so over the next 4 years Just 6% of organisations said they would wait for the Government legislate before taking action. This figure is slightly higher for disability, where 8% of businesses are waiting for legislation.
But progress on reporting risks running out of steam as businesses struggling in the aftermath of the pandemic struggle to allocate sufficient budget, time and skills to the issue. Business cite securing a budget to access expertise as the biggest challenge when it comes to reporting on the gender pay gap. Almost a quarter of firms (23%) have come up against budgetary barriers, and many cite challenges with understanding the legislation (21%). The other biggest challengers are finding the time (22%) and competing priorities (20%), which may reflect trimmed down HR management teams post-Covid.
20% of employers also report difficulties communicating with their employees. This reinforces Barnett Waddingham’s 2021 survey of UK employees, in which just under one third of both men and women didn’t believe their employer had an action plan to deal with any gender pay gap and an additional 30-40% of all employees were unsure. The overwhelming take away is that, whilst this is an important workplace issue, communication is not getting through to employees. Moreover, restricting pay gap reporting to gender alone could feel quite outdated and non-inclusive for diverse workforces.
Melissa Blissett, Senior Consultant – Pay Gap Analytics, at Barnett Waddingham:
“These findings show that measuring and reporting on the gender pay gap is changing the face of British business for the better. So why isn’t the Government acting more quickly to legislate ethnicity pay gap reporting?
“As data analysts we are well aware of the statistical concerns the Government has previously raised around ethnicity pay gap reporting – however to a degree, these hold true for gender pay gap reporting too. This is addressed by the organisation’s accompanying narrative. The key point is that a legislative requirement opens up conversations that may not otherwise happen and drives change.
“Reporting on these additional pay gaps would bring to light inequalities in boardrooms and businesses throughout the UK, allowing companies to make more informed decisions about how they recruit and retain talent as well as fostering an inclusive working environment. It’s such a logical next step that many businesses are already initiating ethnicity and disability pay gap reporting voluntarily. Surely the time has come for the Government to address the elephant in the room.”
*2022 Gender Pay reporting deadlines are 30th March (for public sector organisations) and 4th April (for private sector organisations).
Barnett Waddingham conducted a survey of 300 Senior Decision Makers at UK businesses between 9th March and 16th March 2022 asking them about the future of work. Sole traders were excluded.
