Nearly one fifth of large employers don’t carry out gender pay gap reporting, despite legal requirement to do so, new CIPD report shows
Pay gaps remain a major challenge across the UK, and the latest findings from the CIPD’s Pay, performance and transparency 2024 report, supported by ADP, a leading global technology company providing human capital management (HCM) solutions, show that an alarming number of employers are not conducting their gender pay gap reporting in line with government requirements.
Almost a fifth (17%) of large employers (250+ employees) said they haven’t carried out gender pay gap reporting and 18% said they didn’t even know whether their organisations had conducted reporting. The organisations most likely to admit to not carrying out gender pay reporting in the 12 months to October 2023 are those employing between 250 and 499 people (29%), despite it being a legal requirement for all businesses with 250 or more employees in England, Scotland, and Wales.
As a result, the CIPD is calling on employers to help tackle discrimination and inequalities at work by reporting on their gender pay gap data and analysing that data to create a narrative and action plan.
It’s important that employers understand the causes of their gender pay gap, including looking at how people are recruited, managed, developed, and rewarded, to ensure a fair approach. With this insight, a narrative can be created to explain the numbers and an action plan can be developed to address inequalities.
Charles Cotton, Senior Reward Adviser at the CIPD, the professional body for HR and people development, said: “What gets measured, gets managed, and with just over a month until the end of the gender pay gap reporting year, employers need to get ready to report. We encourage employers to not only calculate their gender pay gap data, but to really understand the reasons for it, and act on them wherever possible.
“Pay gap reporting is an important part of ensuring a fair workplace, as well as having clear business benefits, such as attracting and retaining talent by showing a commitment to good practice. It’s important that employers understand the barriers their people may face, not only relating to pay, but also in terms of recruitment, promotion and development opportunities. Pay gap reporting, along with having an effective narrative and action plan, can identify and help tackle the causes of gender inequality.”
Sirsha Haldar, General Manager of the UK, Ireland & South Africa at ADP said: “Employers must trust accurate indicators linked to their payroll systems to move beyond assumptions and analyse their real data, pinpointing any pay gaps. Without such tools and a committed budget for workplace equality, this injustice may endure, fostering diminishing employee morale and loyalty. Pay disparities can drive away valuable female talent and tarnish a company's reputation, especially among younger generations increasingly concerned about equality in pay.
“We also want to put an emphasis on the delicate balance between transparency and confidentiality in salary information sharing. As organisations navigate the landscape of transparency in the modern work environment, the findings will empower decision-makers to strike the right equilibrium, fostering trust and collaboration within their teams.”
While gender pay gap reporting is legally required for large employers, and is vital for gender equality and progression, there are other areas of inequality where reporting on pay disparities can bring much needed transparency, for example disability and ethnicity pay reporting.
This report also found that, in the year to October 2023, 40% of large employers had already carried out an analysis of their ethnicity pay data, 35% had not, while a quarter didn’t know. Over a quarter (27%) of large employers had conducted a disability pay report, 46% had not and 28% didn’t know.
These are areas that employers can and should also focus on, despite there being no legal requirement to do so. Reporting on these pay disparities can help employers understand where they need to take action to address discrimination and other causes of inequality at work.
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We encourage employers to not only calculate their gender pay gap data, but to really understand the reasons for it, and act on them wherever possible.
