Employers may be forced to draw up and publish action plans to tackle their gender pay gap if progress in tackling the problem continues at the current glacial pace, XpertHR has warned.
XpertHR’s analysis[i] of data published by companies over the first two years of the gender pay gap reporting requirement shows that the difference in men and women’s pay has closed by just 0.2 percentage points, or 2p for every £10 of pay gap.
This means at the current rate, it will take more than 65 years to close the gap – meaning that babies born in 2019 will go through their entire working lives and be nearing retirement before the gender pay gap becomes a thing of the past.
More immediately, the government has promised a review of the gender pay gap regulations after five years. And with three “snapshot” dates – the day at which the gap is calculated – having passed with little progress being made, time is running out.
XpertHR content director Mark Crail said: “Organisations that do not yet have a clear understanding of their own pay gap, and a plan for tackling it, really are setting themselves up for problems over the next two or three years.
“Employers need to understand what drives their pay gap – whether it is related to a simple lack of women in senior roles, or to deep-seated issues around for example occupational segregation or the effect of different length of service patterns – before they can come up with an action plan.
“So far, many have been able to point to genuine historical reasons for their problem, and there has been some sympathy for their position; but the clock is ticking and that sympathy is running out.”
He warned that employers needed to calculate their 5 April 2019 gender pay gap as soon as possible and not wait until the reporting deadline of April 2020 to do so.
“That would be another year wasted. Another year with no plan. Another year with no actions taken to close the gap. Another argument for forcing employers to act on the evidence.”
While stricter measures are speculation at present, a government review in 2022 could result in:
- More detailed reporting requirements, with employers ordered to make public additional data and explanations for their pay gap;
- Stronger enforcement powers, with the possibility of clearly set-out financial penalties for those failing to report adequately;
- Compulsory requirements on employers to draw up and publish action plans with clear targets for closing the gender pay gap;
- Stricter rules for companies doing business with the public sector to go above and beyond the legal minimum.
[i] Analysis based on data published by a matched sample of employers that reported in both 2018 and 2019 – excluding those which reported once only due to changes in employee numbers, mergers, acquisitions etc.