Employers being left ‘in the dark’ on gender pay gap reporting, says HR body

CIPD Ireland, the professional body for human resources and people development, has called on the Government to immediately publish the regulations that will apply to larger companies under the Gender Pay Gap Information Act 2021, saying it is "unfair" to leave employers in the dark.

“Time is growing short for employers who will be required to report data from their organisation based on a ‘snapshot’ date in June, but have yet to learn how exactly they will do that, almost one year since the law was passed,” the organisation said.

The Government confirmed in March the regulations will require organisations with more than 250 employees to report their gender pay gap for 2022 in December, with the data based on a “snapshot” date of their choosing in June.

Employers must report the mean and median hourly wage gap, data on bonus pay, the mean and median pay gaps for part-time employees and those on temporary contracts, and the proportions of male and female employees in the lower, lower middle, upper middle and upper quartile pay bands.

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Employers will also be required to publish a statement setting out reasons why any gender pay gap exists and what measure are being taken or proposed to close or reduce it.

The legislation will be extended to organisations with 150 or more employees in 2024 and organisations with 50 or more employees in 2025.

Seeking clarity

CIPD Ireland wants the Government to clarify what should be included in hourly pay, what formula to use to calculate gaps in benefits, whether employers will have to publish pay gaps by job classification and other technical matters relating to whose pay should be included in the analysis.

"It has been an incredibly turbulent couple of years for business, but the lack of information on how to report figures under this legislation is now holding companies back on this issue and employers are urgently looking to government to take action on providing clear definitions, formula and calculation tools," said CIPD director Mary Connaughton.

“Firms with over 250 employees are the first group being asked to report by the end of 2022 which means there is a huge amount of work to be done by each of those businesses and with just a few weeks left to go to the snapshot date, it seems very unfair that they’re still in the dark.”

Ms Connaughton said gender pay gap reporting was a “vital part” of the modern Irish working landscape and it was therefore “crucial” to get it right.

“Transparency around pay structure is something people are now actively investigating when considering a change of job. In the new world of working, issues such as hybrid, flexible or remote working policies, approaches to worker wellbeing and gender pay gap reporting will all be critical factors to retaining and recruiting talent.”

Employee turnover more than doubled in 2021 to 18 per cent, up from 8 per cent in 2020, according to the latest HR Barometer Report published by Adare Human Resource Management.

The consultancy said it expected workforce churn, which is now at its highest level in at least six years, to remain above 18 per cent in 2022.

More than half of employers surveyed on its behalf in April by Amárach Research cited “higher salary with the new employer” as the main reason why an employee had left, with “career progression” and “better work-life balance” the second and third most common reasons for resigning.

Adare said 54 per cent of employers have or will be increasing salaries in 2022 to address the turnover challenge, with an average increase of 5.3 per cent forecast.

Four-day week

Meanwhile, more than half of Irish professionals believe a four-day working week will become a reality within the next five years, according to recruitment company Hays Ireland.

Two-thirds of Irish professionals would be tempted to move organisations if they offered a four-day working week, its survey of more than 1,500 employers and professionals found, while 6 per cent of Irish workplaces have already implemented a four-day week either on a trial or permanent basis.

"While the number of employers currently offering a four-day working week is still extremely low, today's research suggests that this may soon change," said Maureen Lynch, director at Hays Ireland.

“At a time when the market has never been more competitive, the proposition of a four-day working week may present an exciting new opportunity for employers to differentiate themselves from their competitors.”