Everyone benefits from closing the gender pay gap

Irish companies will soon be required to publish data on their gender pay gap – and that’s a hugely positive development

‘The more diverse voices you can bring into your organisation, the more successful your business will be.’ The gender pay gap has been reduced by 19 per cent in Britain since mandatory reporting was introduced there in 2017. At first, many businesses felt exposed and vulnerable to the level of transparency required. It’s clear to see why: the threat of bad press, reputational damage and losing customers and staff looms over businesses that fail to address the inequality.

Everyone benefits when the gender pay gap is minimised

Companies experience higher productivity, engagement and morale. Employee retention improves, and brands save on the cost of new hires. Now Irish companies with 250 employees or more need to publish and provide justification for their gender pay gap. This includes pay and bonuses. The requirement was made law in July this year and is likely to be implemented in early 2022. The new law in Ireland means companies need to start collating and analysing their employee data, marrying their report with a plan of action, and continuing to minimise the gender pay gap.

Fortunately, four years of reporting in Britain has given way to a whole host of best practices and lessons from which to learn. Reporting your gender pay gap is a valuable learning experience, but if you really want to reap the rewards of a diverse and fairly paid workforce, you need to build a strategy based on the data.

After the first year of reporting in Britain, the CIPD, the professional body for human resources, found that 29 per cent of respondents hadn’t made – and had no intention of making – any changes to pay in light of the gender pay gap reporting. And of the organisations sampled, only 10 per cent had taken action after publishing their pay gap. Irish businesses will be required to justify their pay gap. This requires a deeper analysis of the data. Companies will have to look inwards and address the structural and social issues within their business that have led to inequalities. It’s a valuable exercise; businesses can pinpoint where their gender pay gap stems from, which makes designing processes and systems to mitigate the disparities far easier.

But the devil is in the detail, and unless companies have access to the nitty gritty of their data, it will be difficult to locate potential discrimination. Businesses in Ireland need a holistic view of their employees, understanding the gender balance in departments, locations and specialities.

Fortunately, most companies already have this information in their HR systems. This is where a centralised HR database comes in really handy; you can organise and analyse employee data in one place, without having to work through multiple formats. Everything is kept in a single location, so you’ll know exactly where to find data that supports your report and justification.

So, what about if gender pay gap reporting goes in your favour? What if you’ve made promises and kept them, analysed the data, and provided a solid strategy on how you’ll reduce your gap even further?

The next generation is looking to work for companies that align with their values, and customers have so much purchasing power that they can afford to be picky about who they spend their money with. If customers see you treating your staff well, they’ll expect to be treated well in return. This kind of brand loyalty can’t be bought or sold.

And if you’re treating female talent fairly, you’re bound to attract more. The hiring pool expands as your approach to closing the gap improves. If women are not seeing opportunities to develop leadership skills, move upwards in the company, or even just reach the pay grade of their male counterparts, they’ll find another employer who meets those needs.

While there will be financial penalties for non-compliance, it might be the threat of bad press that seems more intimidating. What about if your business stands out with a reputation for tackling gender inequality rather than magnifying it? Positive and negative press touches your customers, employees and investors, who all have a say in whether your business survives.

The more departments you collaborate with, the more value you can achieve from gender pay gap reporting. And the same is true for closing the gender pay gap. The more diverse voices you can bring into your organisation, the more successful your business will be.