Gender pay gap reporting: could diversity, equality and digital maturity go hand in hand?
With better reporting comes better visibility into what’s working and what isn’t with charity culture – a crucial first step for a charity sector looking to identify and tackle inclusion issues in the workforce.
This April, Government figures revealed that men in the charity sector are paid almost 8% more than women – despite women making up the majority of the workforce.
Since 2018, it’s been the law for all organisations with more than 250 employees to submit their annual gender pay gap data to the Government by 4th April, in a report that outlines the difference between the hourly rates of pay of male and female employees and the proportions of male and female employees in different pay grades.
As charities prepare for their third year of gender pay gap reporting, there are a few important lessons to be gleaned. One is the need to challenge the charity sector’s inability to get visibility and analysis on its own data.
Despite gender pay gap reporting beind in its second year, over a fifth of people (21%) say their company struggled to file the mandatory report. A Twitter poll by MHR Analytics of 1000 people aged 25 to 54 revealed a further 38% are still unclear about their organisation’s gender pay gap reporting.
Of those organisations that have missed the deadline to report over the last two years, four were charitable trust organisations and ten Housing Associations, all of which face enforcement action by The Equality and Human Rights Commission (EHRC).
This year, around 1,600 organisations, or 15%, made mistakes in their reporting.
Rebecca Hilsenrath, chief executive at the EHRC, said of erroneous or incomplete reporting: “’We cannot achieve gender equality in the workplace without first shining a light on the problem and understanding the underlying causes of inequality. That’s why gender pay gap reporting is so important.”
Narrowing the gap
As we’ve shown previously, when it comes to inequality of opportunity in the charity sector, whether based on gender, ethnicity or other factors, a great deal of anecdotal evidence from those with direct experience is starting to come to light, but hard data remains sparse. But while issues such as unconscious bias in recruitment and promotion are incredibly tricky to prove, surely reporting on something as objective as pay data should be routine for charities?
With the addition of mandatory ethnicity pay gap reporting potentially on the horizon, the compliance burden is growing for companies without adequate reporting tools in place, says Laura Timms, product strategy manager at MHR Analytics.
“This legislation can be a significant drain on time and resources, particularly when added to all the other compliance obligations for HR, payroll and finance teams,” says Timms.
“This year’s data shows pay discrepancy has increased in many companies. Narrowing this gap to meet government targets will require proper data analysis. Employers will need to assess the complex underlying factors behind their pay gaps and make evidence-based plans to address them.”
This won’t be a quick fix, as some reports even showed errors in their reporting, indicating the need for better accuracy. The Charity Commission itself has admitted that it published incorrect gender pay gap figures last year that suggested it paid women more than men in 2017, when in fact men were paid more on average.
While the Government’s gender pay reporting system is far from perfect, charities without adequate data reporting technology are doing nothing to help themselves. Manually analysing employee payroll data can be an extremely tedious process involving the management of multiple spreadsheets, and this can represent a time sink that charities simply can’t afford.
“Pay gap reporting software speeds up the process drastically and eliminates manual errors,” Timms advises. “These tools also help companies understand how their pay gap fluctuates across different locations, departments and job roles, providing sound evidence on which to base their plans to narrow pay gaps.”
Knowledge = Power
Better visibility into employee data is not just desirable for large organisations. All charities should be looking at the concrete steps available to them, beyond just meeting statutory reporting requirements.
We still live in a country where one in eight employers say they “would be reluctant” to hire a woman who they thought might have children – according to a Government survey of HR decision makers in partnership with the Young Women’s Trust.
And while the voices of BAME (Black and Minority Ethnic) charity workers are beginning to be heard, there is a danger that they could be shouting into the dark without the real data to back it up.
There are simple guides available from the NPC and others on h0w charities can start to build a data mindset and basic data collection and analysis skills into their work and culture, and we’ve featured a wealth of data resources for charities to get started. While the focus is often on impact and fundraising, data can be a powerful tool to improve not only the effectiveness of charities’ operations, but their accountability and transparency in areas such as diversity.
Real change requires getting serious about data to identify gaps and shortcomings, set goals and work towards improving diversity and inclusion – this blog from HR Technologist explains some good places to start.