Managing The Gender Pay Gap – And How Good Payroll And HR Software Can Help?

Managing The Gender Pay Gap

At the start of March, before the understandable increase in coronavirus-related news, there was quite a bit of coverage about the size of the gender pay gap. It’s the third year that UK companies have been required to provide gender pay gap reporting; based on data submitted to date, the overall gap’s believed to currently be in the region of around 17%.

There were specific pay gaps that certainly caught the eye; for instance, HSBC’s gender pay gap stands at around 47%, more or less the same as the year before. For financial and insurance firms overall there’s actually been a slight increase. It seems that gender pay remains a sizeable issue for many firms to tackle.

What is the gender pay gap?

gender pay gap

The gender pay gap is a different thing to equal pay. Equal pay is the legal obligation to ensure men and women receive the same level of pay for similar work. It applies to every size of organisation.

The gender pay gap, however, is about average differences between hourly earnings for men and women in organisations with 250 or more employees. Essentially, there are six main calculations required: mean gender pay gap, median gender pay gap, mean bonus gender pay gap, median bonus gender pay gap, proportion of males and females receiving a bonus payment and the proportion of males and females in each quartile band.

Employers can also provide a narrative to explain the gaps that are revealed once the data’s been gathered in. There can be many things that affect them, such as an imbalance between the number of men in higher paid roles compared to women who are holding more junior positions. There might be a larger proportion of women working part time too. It’s not necessarily a sign of unlawful discrimination practices.

What steps can businesses take to manage pay gaps?

gender pay gap discussion

What this kind of reporting does do is encourage employers to take a careful look at the reasons why they have a pay gap and assess whether there’s an issue and, if so, what they can do about it. Not only is it an important consideration for businesses in the here and now; it’s also important given the knock-on implications for the gender pension gap too.

Are there more women working part time due to caring responsibilities? If so, it might be appropriate to take a look at flexible working procedures. Are flexible opportunities open to everyone and can they be made available at all levels throughout the company perhaps? If there are more women in lower-paid tiers, could companies find ways to develop them and encourage them into applying for more senior roles? Look at recruitment practices too.

Could there be any unconscious biases at work, or stereotypes at play in recruitment decisions being made? What about external branding – are you appealing to new recruits in a genuinely gender neutral way? Businesses could also consider the merits in evaluating positions when recruiting, and making the salary offer based solely on market rate.

Payroll and HR software plays an important role

gender pay gap 2020

Clearly, gathering in all the data needed to report on any type of pay gap is not a simple thing to do. It’s not a quick and easy job and the larger the organisation, the harder it can be. And not every company is in the position of having robust reporting systems.

Fortunately, there are solutions in the forms of payroll software and HR software. They can efficiently capture what can be quite complex data, and then be configured to provide all the necessary information required for accurate and efficient pay gap reporting.

As well as providing the initial reporting data that’s required, payroll software and HR software can also assist with the breakdown of data. That gives companies more insight into what the data’s telling them and better enables them to identify what actions could be taken to address issues that have been flagged up. And of course companies that use an outsourced payroll provider have the even greater advantage of both the efficiency of the software combined with full support for all associated demands of pay gap and payroll reporting.

Could you benefit from more support with your gender pay gap reporting and, in fact, any other type of payroll and HR reporting that’s required of your business? To find out more about our payroll software, HR software and managed payroll services, please call us on 01442 285460 or complete our contact us form and we’ll be in touch.