In recent years, the issue of gender inequality in the workplace has gained significant attention worldwide. Governments and organisations have recognised the importance of providing equal opportunities to women and have taken actionable steps to address this issue. Gender pay gap reporting has emerged as a powerful tool in promoting gender equality in the professional realm and fostering positive change across organisations.
At FDM, we conduct a gender pay gap report on an annual basis and we strongly believe that understanding the gender disparities within our organisation requires a holistic approach that goes beyond government compliance. Our report delves into the support we provide for individuals from diverse backgrounds, our commitment to social mobility, our women in tech initiatives, and so much more.
So, whether you’re new to gender pay gap reporting or seeking to refine your existing practices, this guide aims to provide practical insights and resources to help you calculate your gender pay gap. It will aid you on your journey towards gender pay equality and contribute to a more inclusive society as a whole.
What’s in this article?
- What is a gender pay gap report?
- Who needs to publish a gender pay gap report?
- When do employers need to publish their gender pay gap report?
- A step-by-step guide to gender pay gap reporting
- 5 Best practices for gender pay gap reporting
- Next steps
What is a gender pay gap report?
A gender pay gap report is a document that provides an analysis and breakdown of the difference in average earnings between men and women within an organisation, industry, or country. The report aims to highlight any disparities in pay based on gender and shed light on potential gender inequality in the workplace.
Sheila Flavell, CBE the Chief Operating Officer of FDM Group says –
Gender pay gap reporting is crucial for organisations, as a vital measure of diversity, equity, and inclusion. It identifies how a business is performing against key metrics of gender representation highlighting both the wins and more importantly, the areas of improvement.
Sheila Flavell, COO, FDM Group
FDM has always championed the cause of bringing more women into the workforce, particularly in sectors like tech where they have been historically under-represented. 31% of our global workforce are female and in 2022 we reported a -4% mean gender pay gap, revealing that our mean female employees fared better than their male peers.
Our Returners Programme has a 75% female intake and we regularly host career attraction initiatives, such as female-only digital bootcamps, CV workshops and interview training to help boost the confidence of women looking to enter a career in tech.”
Equal pay vs the gender pay gap: what’s the difference?
Equal pay refers to the legal requirement that men and women are paid equally for performing the same or similar work of equal value. On the other hand, the gender pay gap measures the difference in average earnings between men and women across a workforce, without taking into account their role or level of seniority. A company that pays women and men equally for the same work can still have a gender pay gap, for example, if the majority of senior roles are occupied by men and lower-paid jobs by women.
What data should be included in a gender pay gap report?
Typically, a gender pay gap report will contain statistical data and findings regarding the average salaries, bonuses, and benefits received by male and female employees. However, in some cases, a gender pay gap report will look at the bigger picture, examining the representation of men and women across different job levels or positions within the organisation too.
The report can also analyse the underlying factors contributing to the gender pay gap, such as disparities in experience or qualifications, occupational segregation, or potential bias in the recruitment and promotion process.
Who needs to publish a gender pay gap report?
If you’re an employer with more than 250 employees on the government’s ‘snapshot dates’, you are required by law to report on your gender pay gap annually. Failure to do so on time or with accurate data could lead to legal action taken by the Equality and Human Rights Commission (EHRC). This can result in court orders and hefty fines!
Likewise, if you are late to publish your gender pay gap report, you will receive a ‘late badge’, which is visible to the public and may cause damage to your business’ reputation.
This legislation exists to encourage transparency and accountability, urging employers to address any gender pay disparities and implement measures to promote equality in the workplace. By providing a comprehensive overview of the gender pay gap, these reports serve as a basis for informed discussions and policy development in favour of gender equality.
When do employers need to publish their gender pay gap report?
In the UK, the deadline for publishing the gender pay gap report is annually on or before the 31st of March for public sector organisations, and on or before the 4th of April for private and voluntary sector organisations. Your report calculations must be based on payroll data on these ‘snapshot dates’. The report must be published on the employer’s website and remain publicly accessible for a minimum of three years.
Note that deadlines are subject to change, so it’s important to keep up to date and consult the latest government legislation to ensure compliance. For more information, see the statutory guide on when to report.
We recommend that you report your data early and publish your report as soon as you can after data collection. This way, you can mitigate any unexpected roadblocks, ensure you don’t miss the deadline, and get a head start on addressing any pay gaps you may have!
A step-by-step guide to gender pay gap reporting
Gender pay gap reporting can be broken down into five simple steps:
- Checking the reporting requirements
- Collating a list of employees and their genders
- Making your calculations
- Writing up your report
- Publishing your report to the public
1. Checking the reporting requirements
You’ll need to calculate your company headcount at the time of the snapshot date to help you identify whether your business is liable. If you had fewer employees for the majority of the year you still need to publish a gender pay gap report.
Reporting requirements will vary depending on the type of business you are. The snapshot date for private limited companies is the 5th of April and the 31st of March for public authority employers. You must use the pay period in which your relevant ‘snapshot date’ falls.
2. Collating a list of employees and their genders
Before you begin making your pay gap calculations, you must first prepare your data. You’ll need to gather payroll data for each of your employees, which should include their gender, job roles, and pay. Ensure that you have accurate and up-to-date data for the reporting period.
Collecting this data can sometimes be more difficult than it sounds, especially if you have employees who do not receive basic pay. The government provides handy advice on how to prepare your data, covering employees who receive ordinary pay, bonus pay, weekly working hours, and hourly pay.
You may choose to reference HMRC documentation to gather this data or reach out to employees directly. Whichever you decide, it’s important to remain respectful. When dealing with gender in the workplace, it is imperative that you are sensitive to employees’ preferred gender identities. Consider including transgender, cisgender, and non-binary data within your report.
Always ensure you store this data securely to prevent any data breaches and noncompliance.
3. Making your calculations
Now you have all your data collected, you need to turn this into tangible insights into your gender pay gap. You are typically required to calculate the following:
- Overall gender pay gap: this includes the mean and median gender pay gap, which reflects the difference in earnings between men and women across your entire workforce.
- Gender bonus gap: this measures the difference in average bonus payments received by men and women, including both the mean and median value.
- Proportion of men and women receiving bonuses: this data reveals the percentage of male and female employees who receive bonuses, which helps identify any discrepancies in bonus eligibility and distribution.
- Male and female representation in different job levels: this breaks down the workforce by quartiles or different job levels, showing the difference in the representation of men and women across all of these groups and highlighting any imbalances.
It is best practice to store this data in secure spreadsheets with relevant formulas to make the process easier in the future. And again. It’s important to note that UK legislation is subject to change so we urge you to refer to the most up-to-date government advice beforehand.
For more detailed information on how to calculate your gender pay gap, please refer to the government equalities office guidance.
4. Writing up your report
Although there are core metrics you must include in your gender pay gap report, it is not uncommon for businesses to include a variety of voluntary data points and provide a narrative to support their data - like we do at FDM. By doing so, you are able to provide context and explanations for the observed gaps, as well as measures or actions to be taken to address them.
While not a legal requirement, this narrative helped provide an understanding of the organisation’s proactive efforts to promote gender equality and improve its reputation. Just make your goals realistic and achievable to avoid giving out false promises, which can cause backlash!
5. Publishing your report to the public
The final step to gender pay gap reporting is to make your report public. You’ll need to publish all of your data online on the government portal and on your own website. Where you host this on your website is up to you. At FDM, we prefer to make our report seen, which means it’s front and centre on our site, and we promote it off-site too. However, many employers host their gender pay gap report in a similar location to their Modern Slavery Statement, in the footer on their site.
5 Best practices for gender pay gap reporting
- Accurate data collection
- Carefully select your metrics to spark meaningful conversations
- Delve deep into your data analysis
- Make your report accessible to all
- Establish a plan of action and stay accountable
1. Accurate data collection
Use accurate data collection methods to ensure full transparency and credibility in your gender pay gap report, and also avoid any fines for noncompliance.
2. Carefully select your metrics to spark meaningful conversations
Select and calculate meaningful metrics that provide a true representation of the gender pay gap within your organisation, as well as the other data points that will spark meaningful conversations and promote organisational change. This could include broadening your insights into pay disparities for other minority groups. Using multiple metrics can help to build a more nuanced picture of your organisation’s current approach to diversity, equity, and inclusion.
3. Delve deep into your data analysis
You should aim to explore more than just the numbers, delving deeper into the analysis and looking at the underlying factors that may be behind the disparities. Contextual information can help key stakeholders understand the complexities involved and also build trust with employees who may be affected by the gap.
4. Make your report accessible to all
It is imperative that you make your gender pay gap report clear and concise, making it accessible to a wide range of audiences. Avoid jargon, use simple language, and implement visual aids and infographics to present data and key findings. This will make your report more engaging and enhance its impact.
5. Establish a plan of action and stay accountable
Don’t make gender pay gap reporting a ‘one-time thing’. Establish an action plan and outline specific strategies and initiatives based on your findings with clear goals, timelines, and resource allocation. You should benchmark your progress and monitor success every year with your annual pay gap report.
We recommend delegating the responsibility of creating a gender pay gap report to the right people within your organisation. Typically, the process will involve input from your human resources team, payroll department, data analysts, diversity teams, and legal department. If you want to promote your report internally or externally, you may also want to bring your marketing and comms team on board as well.
While gender pay gaps can’t be solved overnight, the act of reporting and outlining a roadmap to close the gap will pave the way for meaningful change. By analysing and disclosing data on the disparities in earnings between men and women, employers can gain valuable insights into their organisational dynamics and take the necessary steps to address any gender-based inequities. Even if you are not legally required to publish a gender pay gap report, we highly advise creating one nonetheless. These reports go beyond compliance with legal obligations, they demonstrate a commitment to transparency, fairness, and diversity - something that every business should thrive for!
Now, you should have a solid understanding of gender pay gap reporting and the tools you need to get started. Check out FDM’s gender pay gap report to see an example of what this could look like.