Clear communication will be key to complying with the new pay gap reporting rules

By the end of December, all organizations across Ireland employing more than 250 people must disclose their gender pay gap using a range of metrics.

This is to comply with the Gender Pay Gap Information Act 2021.

For many Irish companies, this will be the first time they have disclosed their gender pay gap and with the reporting deadline fast approaching, significant company reputation implications need to be considered.

Gender pay gap reporting measures the difference between the average pay of men and women within an organization and provides transparency for all stakeholders by highlighting if one gender is disproportionately represented in the high-paying tiers of an organization.

Unlike the UK, legislation in Ireland requires more than disclosure of data.

Irish companies must explain the reasons for the gender pay gap and offer a strategy for how the organization intends to address it.

This requirement means that companies must not only share data results, but also contextualize the data in a way that they understand the underlying causes of their imbalance.

To comply with disclosure requirements, the detail must be posted on the employer’s website or other means accessible to all employees and the public.

In the report, employers must set out – in the opinion of the employer – the reasons why the gender pay gap exists and the measures (if any) taken or proposed by the employer to eliminate or reduce the gender pay gap.

This added layer of disclosure and scrutiny may present communication challenges for organizations in the coming weeks, and clear communication with stakeholders, both internal and external, will be critical.

How this additional detail is provided in the report will affect how stakeholders perceive an organization from both a cultural and reputational perspective.

Details surrounding the gender pay gap and the overall balance between men and women at various levels also feed into an organization’s Environmental, Social and Governance (“ESG”) disclosure and message.

The company has asserted itself as ESG Agenda companies are facing increasing pressure from investors to improve diversity, and reporting on the gender pay gap provides investors with another metric to assess how well a company is executing on its social agenda.

With pressure from stakeholders to increase the number of women in leadership positions, reporting on the gender pay gap provides another platform for organizations to communicate their overall approach to talent development and improving diversity in their organization.

Understanding the root cause of gender imbalance within an organization will be an important part of the narrative.

Only when organizations have a clear understanding of why a pay gap exists can they take action to address it.

For example, what is the rate and gender ratio of promotions in the workforce?

What is the return rate for women after maternity leave?

Or are lower-paid/part-time positions mostly held by women?

By identifying trends impacting the gender pay gap, companies can address the issue and make meaningful changes.

whSome branches may have Wii.eHe gender pay gap than others, an explanation that goes beyond blaming the industry is needed for clear and transparent disclosure.

For companies operating in an industry traditionally dominated by one gender, stakeholders will want to see what steps your organization is taking to achieve more balance.

Company reports should include guidelines and case studies where appropriate to highlight diversity as a strategic priority across the organization.

Stakeholders will want to see what plans companies are putting in place to close the pay gap and what targets are being set to ensure they are ambitious, meaningful and achievable within a reasonable timeframe.

Reporting a gender pay gap alone may not create a reputation problem for a company.

However, how a company reports the data, addresses the results, and outlines its plans to bridge the gap has the potential to impact an organization’s reputation, positively or negatively.

Organizations that choose to do what is necessary to comply with disclosure requirements are more likely to face scrutiny and suffer reputational damage.

Forward-thinking organizations should not consider this requirement as a risk to themselves.

It’s an opportunity to craft a pragmatic, credible plan to achieve the many business benefits that result from a more balanced, diverse workforce.

Melanie Farrell is Managing Director of Strategic Communications at FTI Consulting Clear communication will be key to complying with the new pay gap reporting rules

Fry Electronics Team

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