Is closing the gender pay gap really opening the door for women?

When the Gender Pay Gap Information Act of 2021 came into effect one of the great hopes was that it would open new promotion opportunities for women in organisations with poor results. These hopes were based on the way organisations are required to report across multiple dimensions and how this would expose gender imbalances at senior levels as well as disparities in bonus schemes and other areas.

Four years on and organisations with more than 250 employees are preparing for their third round of reporting. They are joined this year by organisations with more than 150 employees who will be reporting for the first time. Organisations with more than 50 employees will begin reporting next year.

Under the legislation, employers are required to report the mean (average) and median hourly wage gap, the former reflecting the entire pay range in an organisation and the latter excluding the impact of unusually high earners; data on bonus pay; and the mean and median pay gaps for part-time employees and for employees on temporary contracts. They are also required to report the proportions of male and female employees in the lower, lower middle, upper middle and upper quartile pay bands.

That’s not all. They are also required to provide reasons for the pay gap, as well as details of their plans to address it.

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The reports are based on the 12-month period up to a “snapshot” date in the month of June, with results being published in December of the year in question.

While there has been some improvement in the overall pay gap, there is little sign of the early hopes for greater promotional opportunities for women being realised.

“The introduction of the Gender Pay Gap Information Act 2021, and subsequent regulations, aims to improve the representation of females throughout the organisation, in particular in more senior positions where they have been historically underrepresented,” says Deloitte head of reward services Anne Kelleher.

“To date, only companies with 250-plus employees have been required to report their gender pay gap metrics in Ireland,” she adds. “Deloitte conducted a survey earlier this year of 500-plus companies’ 2023 gender pay gap reports and where we are seeing an improvement in the overall mean hourly pay gap metrics of 2 per cent, moving from 13.3 per cent in 2022 to 11.3 per cent in 2023, we are still observing a lack of female representation at the more senior levels in organisations.”

However, there is evidence of organisations taking action to address the gap.

“Looking across all levels in organisations, it is difficult to assess if the gender pay gap reporting in and of itself has opened new promotion opportunities for females,” Kelleher notes. “However, given that companies must disclose the reasons for their gender pay gap, as well as their plans to address and reduce this gap over time, we are seeing companies promoting initiatives such as flexible working cultures, female apprenticeship schemes in male-dominated sectors – and placing a strong focus on ensuring a diverse talent pipeline to drive a more inclusive and equal environment in helping to provide equal opportunities for all genders to advance their career and development.”

PwC Ireland people leader and workforce tax partner Doone O’Doherty believes it is too early to detect trends in the movement of the gender pay gap.

“The calculations cover 12 months’ pay and by the time the calculations are complete companies are already six months into the next reporting period,” she says. “Also, changes can take a few years to show.”

O’Doherty notes that a number of factors influence the gender pay gap figures both positively and negatively.

“Unfortunately, results are not seen overnight and it requires organisational commitment and action to break the cycle and improve gender representation across organisational levels,” she says.

O’Doherty identifies three areas that can help close the gap: recruitment, retention and progression.

“Attract and recruit female talent into the pipeline at all organisational levels. Ensure recruitment practices are free of bias, diverse interview panels are appointed and agency procedure aligns with overarching organisational DEI recruitment strategy,” she advises.

Female talent should be retained through accommodating policies and strong company culture that values and embeds diversity at every level, she says, adding: “Ensure the company’s practices and actions complement DEI efforts and actively foster organisational diversity.”

Under progression, O’Doherty says women should be empowered to climb the career ladder and organisations should recruit internally for senior positions where possible.

“Provide mentoring, coaching and succession plans to enable women to grow and flourish in the organisation,” she adds.

Positive action is being taken, according to Kelleher: “Companies, in advancing their diversity equity and inclusion strategies, have been assessing their gender representation at each level within their business. To promote a more diverse leadership culture and role-model-inclusive behaviours, companies are reviewing their talent management policies and procedures to ensure objective neutral criteria in the attraction, retention, and progression of employees.”

Pressure for further action is only going in one direction. “With more companies falling into the reporting thresholds, companies of 150-plus employees in 2024 and companies of 50-plus employees in 2025, and with the EU Pay Transparency Directive due to be transposed into Irish law in June 2026, companies will need to be able to measure the impact of their actions to reduce their gender pay gap and demonstrate their commitment to pay transparency,” Kelleher explains.

“As several pieces of legislation are expected to govern gender pay gap reporting in the coming years, only time will tell if gender pay gap reporting will make the positive change hoped for when it was implemented.”

O’Doherty believes gender pay gap reporting is a positive step but not a stand-alone solution.

“Organisations must address underlying factors to create real change,” she says. “Encouraging more women in leadership roles, promoting fair evaluations and providing equal opportunities are essential for closing the gap and fostering career progression for women.”