Times are changing fast for Irish businesses. From 2025 those with just 50 or more employees will be required to report their gender pay gap (i.e. the difference in average wages between men and women), compared to those with more than 250 employees this year and those with 150 or more in 2024.
This means if it doesn’t affect many small and medium sized companies already, it almost certainly will within the next three years. For some it may seem a daunting task – both in being honest with themselves about the facts (the gap was 11.3% in 2019) and in knowing how gender pay gap reporting actually works. But with proactive steps taken now to prepare, businesses can set themselves up to avoid any issues when it comes to reporting the right data.
Reporting a gender pay gap
Following the Gender Pay Gap Information Act 2021, Irish organisations of over 250 employees will now be required to report hourly gender pay gap across numerous metrics in 2022. This will involve compiling certain data, full details of which can be found on the government’s official website, but generally you’ll want to take note of the following areas.
Mean and median pay for both male and female employees; including hourly rates and any bonus pay. Those on part-time or temporary contracts count as well. While keeping track of this information you’ll have to factor in both the overall numbers and how they differ in these separate categories for reporting, as bonus payments or overtime may present patterns that explain a particular pay gap.
Keep in mind also the percentage of men and women who received specific bonuses, benefits-in-kind, and those in separate pay bands – lower, middle and upper bands. You’ll need to remember that reporting this information accurately is more important than looking good while doing it; many businesses may find themselves in the position where the initial figures don’t look so great in terms of balance.
Why is it important?
It’s widespread knowledge that men have historically dominated certain areas of business and general working life. It has not always worked successfully though. Women offer unique perspectives that have often been overlooked or, arguably more common today, not adequately reflected in pay levels even when they bring as much to the table as male colleagues. Existing data shows the gap becomes more apparent the higher up the professional ladder you go.
Aside from any moral duty to ensure gender pay equality though, this is important for Irish businesses to consider for another reason. That is, unlike some other countries such as the UK (which began gender pay reporting of this kind back in 2017), Irish companies will be required to explain more specifically why there is a gender pay gap when it comes to reporting this.
Therefore, it becomes more than just a technical reporting issue. You should be prepared for honesty about why there is a gap currently while coming up with an action plan featuring ideas on how to change this going forward. Again, this shouldn’t be about portraying your business in the best possible light; if things aren’t where they should be, showing honesty about where you stand and how you plan on fixing it is crucial, even if the plan will take time to implement.
Being realistic
Realism can, and should, play a part in your reasoning. Some women may prefer working part-time or take a brief career break due to having children and this can have an impact on metrics (it can also be true of men, of course, but less likely overall). The same can be true if they have sick or elderly relatives.
How this plays into the gender pay gap can also be a self-fulfilling prophetic cycle – men are more likely to focus on career progression while women focus more on children or elderly relatives precisely because men can earn more in similar job roles. If there was a better balance in these metrics in future, it may also help alleviate the pressure on some households to hold to these social restrictions.
There’s also no harm in looking at other businesses in your sector and asking what factors (such as redundancy) may have had a positive or negative impact comparatively. These are factors that can also play a role in the report.
Coming up with a plan of action
As important as acknowledging the issues is then knowing what you’re going to do about it. What you’ll be hoping to show here is a clear, concise and professional approach rather than being vague. Here a few ideas for how to approach your own action plan.
It starts during the recruitment process – examine your processes to find out what unconscious bias may already be in play and how to combat this. Encourage women to progress via specially designed talent development or mentoring programmes. For those who are more family focused, you could also try offering family friendly working conditions, asking how you can accommodate those who are trying to balance work with a busy home life.
Communication is key
While communicating accurately and effectively for the gender pay report externally is important, just as vital if not more so is your internal company communication of any findings or upcoming changes. Remember to prepare employees well for anything that may affect them, as failure to do this can upset those who are caught off guard by it.
People in your organisation will inevitably discuss the findings from your report when these are available and you should be prepared to answer any questions about this. Good preparation will ideally mean that even if you aren’t where you’d like to be as a business, you’d be able to explain why this is and what you’re going to do about it – that is the main point of the report.
Summary
Rather than being a daunting exercise, gender pay gap reporting should be seen as an opportunity for your business to take stock of where things stand and improve where necessary. It can be used to build morale if things are going well or a chance to show you’re a proactive employer willing to implement new strategies if they could be better.
For further assistance with providing a quality gender pay gap reporting strategy, look no further than Snow Technology.
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