British business ‘drinking in last chance saloon’ over gender pay gap reporting

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“Drinking in the last chance saloon,” is how the Equality and Human Rights Commission characterised the situation facing British businesses over reporting their gender pay gaps. 

Small wonder. It is now mandatory for all firms with more than 250 employees, but fewer than 4,000 of the 9,000 companies with that distinction have complied with the requirement with the 4 April deadline rapidly approaching. 

If you want to be charitable about it, this could be a case of deadline-itis; the propensity we human beings have to leave things until the last minute. It is the latter that explains why accountants look like characters from The Walking Dead at the end of January despite the fact that they’ll typically start reminding their clients to submit their information for the purposes of calculating their tax liabilities in September. 

A more cynical explanation for what’s going on might be that some companies have taken a conscious decision to leave it late. 

It won’t have escaped their attention that a number of big name companies have taken heat for the figures they submitted early. 

They may therefore have reasoned that they stand a good chance of getting lost in the rush of those filing on or around deadline day. That could prove handy for those whose figures look particularly bad.

The law requiring that companies report is a good one. It seeks to bring about better gender equality in the workplace. This is an issue of social justice, and that alone is a good enough reason on its own for enforcing it. 

But it goes beyond that. The gender inequality that currently exists harms the British economy. I have regularly referred to a study by management consultant McKinsey, which found that companies with better gender equality are more likely to perform better. McKinsey has also estimated that the UK could add £150bn to GDP if its performance were to improve. As such it might help to mitigate some of the enormous, and avoidable, damage being caused by Brexit and the Government’s disgraceful conduct of it. 

Some of the companies that have reported early, and braved some negative PR as a result of the attention given to their figures, have sought to highlight efforts they say they are making improve the situation.

Boots is an example. The retailer has a predominantly female workforce but a gender pay gap of more than 20 per cent (against the national figure of 18.4 per cent). When it published its numbers it was at pains to stress the initiatives it has taken to address that, such as enhancing its maternity offer. 

Sadly, the scale of the foot dragging being witnessed rather suggests that companies like this are in the minority and that some are going to require being dragged through a metaphorical gorse bush to get them to improve.

I’m told that more than 70 per cent of eligible companies have at least registered to upload their figures. On the other hand, more than one in four British businesses haven’t even done that, which is staggering given that reporting is a legal requirement. 

No one has broken any law yet. But the EHCR, which is responsible for ensuring compliance, says it will bring action against those firms that miss the deadline. It should do so. A point needs to be made, and hard. 

Given that it might have a busy few months ahead of it, I’d suggest that it focusses its attention on the biggest recidivists with the most recognisable names for the purposes of making an example.