Pay disparity between men and women is a lost opportunity for businesses to drive growth. Getting your gender pay gap reporting right is the first step in designing an inclusive, diverse workforce. In this article, we look at what’s needed to uncover the causes of the gender pay gap in your organization.
It’s well documented that the best ideas and innovation come from having an inclusive, diverse workforce. A study by McKinsey found that for every 10% improvement in gender diversity, there’s a 2 to 4% increase in profits.
Complying with gender pay gap regulations
For many organizations, reporting on their gender pay gap is now a legal requirement. Every April, businesses in the UK, France, and Germany with more than 250 employees must report their figures to help government assess diversity in the workplace.
For those not subject to regulation, the consequence of not addressing pay disparity is damage to their reputation. This will eventually expand to all aspects of diversity in the workplace. Ethnicity pay is the next reporting challenge to come, with regulation already in government consultation in the UK.
Inaccurate reporting stifles change
What’s clear is that, whether it’s gender pay gap, ethnicity pay gap, or another diversity metric, unless organizations can produce accurate information in a timely way, they will not be in a position to effect change.
Many pay gap reports are inaccurate for reasons including incomplete data, manual methods, and fragmented processes. Not having a streamlined, automated way to prepare reports slows you down and leads to mistakes.
It’s not just about data
In the UK, more than 30% of all submissions in 2019 contained errors, with one in six companies misreporting their figures. Of the 14,000 companies required to submit a gender pay gap report, 725 missed the deadline or later revised their figures.
That said, it’s not just about data accuracy and aggregation. It’s also the processes behind the reports that need improvement. One of the good things about gender pay gap reporting is that it requires HR and Finance to integrate people data and salary data, but they still need to collaborate more effectively. Our research found that only 28% of HR and Finance functions have shared data systems.
Tackling the causes of disparity
However, reporting is just the first step in designing the most productive, diverse workforce possible. Organizations then need to use that information to build an action plan that tackles the causes of disparity and improves workforce diversity. But this plan will not be worth anything if it’s based on the wrong information.
Getting your gender pay gap reporting right means having a fully integrated dataset, generating reports quickly, guaranteeing accuracy of information, and delivering reports in a timely way. You can then run analysis to uncover the causes of gender imbalance in your organization, because the combination of factors will be different for everyone and could affect different parts of the business.
Get ahead of the gender pay gap
Analysis can help to unearth
bias and unsupportive behaviour, so you can set goals to be met over a defined timeframe.
Greater transparency is fundamental to overcoming gender pay differences as it
encourages organizations to decide what action to take.
So, whether you’re on a regulatory deadline or
not, getting ahead of your gender pay gap reporting is the first step to
designing an environment that welcomes people of every description.
To find out more about uncovering the causes of your gender pay gap, download the ebook ‘Mind the pay gap: designing a gender balanced workforce’
 McKinsey & Co. (2018) ‘Delivering Through Diversity’ https://www.mckinsey.com/business-functions/organization/our-insights/delivering-through-diversity
 Personnel Today (2018) Ethnicity pay gap reporting: What employers need to know. 26 October https://www.personneltoday.com/hr/ethnicity-pay-gap-reporting-uk/
 Personnel Today (2019) Gender pay gap 2019: Three in 10 reports have errors, 13 February https://www.personneltoday.com/hr/gender-pay-gap-reporting-2019-errors/
 Personnel Today (2019) Risk of errors high in UK gender pay gap reporting, 5 April https://www.personneltoday.com/hr/risk-of-errors-high-in-uk-gender-pay-gap-reporting/
 The Guardian (2019) Lack of sanctions ‘makes a mockery of gender pay gap reports, 28 February https://www.theguardian.com/society/2019/feb/28/lack-of-sanctions-makes-a-mockery-of-gender-pay-gap-reports