Two Thirds of Companies in Ireland Concerned About Reputational Risks of Gender Pay Gap Reporting – MERCER

Over two-thirds of companies in Ireland (67%) are concerned about the potential reputational risks of gender pay gap reporting, and half (50%) worry about the cost that addressing pay differentials might impose on their business, according to a survey carried out by HR and employee benefits consultants, Mercer.

In Great Britain, mandatory gender pay gap reporting legislation was introduced in 2017.  Under the legislation, organisations with greater than 250 employees were required to submit their first report last month.  The reported data indicates that on average 77% of employers pay men more than women, giving rise to a median gender pay gap of 9.3%.

Whilst the majority of employers met the April reporting deadline, to date 585 employers have reported late.

The expectation is that similar legislation could be introduced in Ireland by the end of this year with draft legislation set to be brought before the Oireachtas in advance of the summer recess.

The Mercer 2018 Ireland Gender Pay Gap Snapshot Survey of 67 organisations employing over 110,000 people in Ireland, reveals that companies here agree with the principle of gender pay gap reporting (74%), and believe it would have a positive impact (67%). However, there is concern about the potential negative reputational impact of mandatory disclosures (67%) with a third of companies (34%) fearing that they will underperform relative to Ireland’s average gender pay gap of 13.9%*.

While the Irish gender pay gap is below the EU average of 16.7%, female representation on publicly listed companies is just 13.2% of board members compared to an EU average of 21.2%**.

The survey reveals a surprising lack of preparedness by companies in Ireland for addressing the issue of gender pay differentials. 70% of companies surveyed said they had yet to explore whether any gender bias existed, and less than half plan to conduct an equal pay audit in the next 18 months. Whilst most companies appear to believe there is a value in gender pay gap reporting, there is considerable concern about the potential cost of addressing differentials, with 50% of companies saying they are worried about this issue.

Helen McCarthy, Senior HR Strategy Consultant at Mercer, commented: “Prompted by some recent high-profile revelations on gender pay differentials, the gender pay gap has received much attention globally, and not before time. Our survey shows that companies in Ireland are taking this issue very seriously amid concerns about the potential reputation impact in the event of mandatory reporting in Ireland.  This, in turn, is sparking different conversations about diversity, inclusion, talent and pay.

“It is good to see that almost three-quarters of survey respondents agree with the principle of gender pay gap reporting and that two-thirds believe reporting will make a positive difference. However, it is concerning that a large majority of companies have taken no action to discover whether gender bias exists in their pay programmes.  In fact, half do not plan to conduct an equal pay audit in the next 18 months while just under half have reviewed policies to improve gender diversity. Clearly, much work remains to be done.”

Commenting on the survey results, John Mercer, Career Leader at Mercer in Ireland noted: “This is a complex area: although pay programmes may cause gender pay gap issues, most of the gap is caused by the lack of career progression for women and the work and types of roles that women are more likely to do. Furthermore, unconscious bias based on cultural attitudes about the roles of men and women in society plays a part.

“Companies in Ireland that wish to redress the balance and embrace the benefits of a more diverse workforce need to look beyond pay alone.

“Initial steps that organisations can take to start addressing this issue include conducting a pay gap analysis and an equal pay audit to help understand what are the underlying factors driving any possible gender pay gap in their organisation.

“Employers should also review their diversity and inclusion strategies and benchmark these against local and international best practice. By addressing long-term drivers of the gender pay gap, employers in Ireland can not only enhance their own competitiveness but also play a critical role in creating a more equitable society for all.”

Mercer’s Career practice in Ireland recommends that employers who are serious about addressing the gender pay gap and embrace the business benefits of a more diverse workforce should:

* Develop better processes for reporting on the complex issues of the gender pay gap and pay equality

* Conduct an equal pay audit and review policies in order to address any identified pay gaps

* Examine career progression and inclusion for women and promote greater flexibility to drive sustained change

For more information visit

https://www.mercer.ie/what-we-do/workforce-and-careers.html [1]

*As identified by the European Commission https://ec.europa.eu/ireland/node/684_en

**As above