Is gender pay reporting really any more than a “tick the box†  exercise? Fiona Hathorn, managing director, Women on Boards, investigates

gender equality

The best companies recognise that what gets measured gets managed and what gets managed gets done. They know their gender data. Their boards understand that losing talent has a negative effect on their business and crucially the Chief Executive knows that that talent is the company’s main asset.

Despite all the effort on this in the last 5 years and the Lord Davies ‘Women on Boards’ review, not much has changed within many companies. According the FT, the proportion of female high earners in the UK has not budged in the past four years, despite initiatives to reduce the gender pay gap.  Data from HM Revenue & Customs shows that women accounted for little more than a quarter — 27 per cent — of all higher-rate taxpayers in each of the past four financial years. Last year, this meant women made up 1.21m of the 4.47m higher-rate taxpayers.

In November 2014 the Office of National Statistics (ONS) published a report revealing that in the year to April 2014, the gender pay gap for all employees stood at 19.1%. The ONS is often quoted as saying that the gender pay gap is much lower (less than 10%), but this is based on looking at full-time workers only (taking out part-time workers). The headline 19.1% figure looks at total workers and it shows the extent to which women are working part-time and are, economically, significantly less financially empowered.

A recent report by statistics agency, Eurostat, has shown that the UK has the 6th largest gender pay gap in the European Union.

Women on Boards UK ( is delighted that the government has taken action to tackle the Gender Pay Gap by forcing transparency of pay gap reporting. This will ensure that large employers in the UK take a look at their pay gap data and consider how inequities might be affecting talent retention.  With a bit of thought it should not be that difficult to count workers and work out average salary comparisons, especially as all the data exists electronically already.  Most organisations will find that once the data has been collated, it will enable them to improve their talent management.  Importantly it will also help the board identify areas of the business which are doing poorly and need support (silo teams that all look alike, for example, which are not good for creativity and innovation).

Without government action Women on Boards UK believes that nothing much would have happened in the UK to improve the country’s talent management and equality standing. The Government’s own research showed, prior to the pay gap reporting legislation, that 3 out of 5 companies had never under taken a pay gap review and they had no plans to do so.

It is encouraging to see companies like PwC, AstraZeneca and Friends Life reporting their gender pay gap and shocking to find others like McKinsey and Company did not do it years ago given that they advise on the need for transparent data reporting.  Organisations where pay and promotion are seen to be fair and transparent win big when it comes to attracting and retaining top talent.  Accepting the embarrassment of facing up to poor pay equity numbers in the short term is likely to pay off in long term competitive advantage.

Catalyst, a US Gender Research Organisation, identified in their 'The Myth of The Ideal Worker' study published in November 2011 that that the gender pay gap started at 18 months, once working. This was a very large study of 3345 men and women, MBA graduates, who had in the most part joined blue chip companies where the salaries of men and women would have been equal on day one. The aim of the study was to determine what individuals do to advance in their careers.  One tactic in particular was more significant for women than for men and that was the need for women to 'make their achievements known'. Basically working hard and being expected to be noticed is was and still is not good enough.

Gender Pay Gap reporting, for companies that employ more than 250 people, will shine a spotlight on the non-listed sector and make companies work harder to encourage more women into their business. Not for box-ticking but because diverse teams perform better. 

Fiona will be addressing the Reward Live 2016 audience, discussing the issues around gender pay reporting and the impact it will have.

She will be speaking at 12.35 on Thursday 12th May. Reward Live takes place at Edgbaston Cricket Ground, Birmingham - CLICK HERE FOR MORE INFORMATION AND TO REGISTER