Gender pay gap set to become controversial in Ireland

Gender pay disparities are set to become a hot topic in Ireland thanks to the government’s plans to push through the Gender Pay Gaps Bill this year.

The original law was dropped when the last general election was called. Now it’s back, with some hardening provisions (for example, non-compliant businesses can expect to receive High Court orders). The reintroduction is timely, as the European Union also recently published a directive on pay equity and pay transparency.

Once the bill is passed, any business employing more than 250 people will have to publish data on the differences between the average and median hourly wage and bonuses of men and women and the percentages of men and women receiving bonuses and benefits in kind.

In the years to come, this requirement will be gradually extended to any company employing more than 50 people.

The gender pay gap should not be confused with equal pay. Equal pay is a legal requirement giving women and men the right to receive equal pay for doing the same work in the same organization. The gender pay gap is a broader measure of the difference between the average earnings of men and women in an organization and can be viewed as an indicator of the representation of women at senior levels.

The reasons for the gender pay gap are many and complex. While it is evident that the lack of career advancement for women is at the heart of this problem, unconscious biases based on cultural attitudes regarding the roles of men and women in society can also have an impact on educational programs. compensation of companies.

Another major problem is that statutory policies on maternity, paternity and parental leave are still primarily aimed at women. The situation is improving and changes have been made in recent years, but we still have a long way to go to catch up with more progressive countries such as the Nordic countries.

According to the latest data from the Central Statistics Office, the average pay gap between men and women in Ireland is 14.4%. This roughly corresponds to the European average. The averages, however, still hide disparities. Some companies will have a much larger pay gap between men and women and, thanks to the legislation, they will now have to reveal the numbers.

When mandatory reporting was first introduced in the UK in 2018, several media outlets named and humiliated organizations with particularly stark pay disparities. These organizations were free to state the reasons, and many did so by posting their plan to close the gap.

It is of course up to the employees, customers and interested investors to decide whether the reasons given are considered a legitimate excuse or a sign of a bigger problem. What is clear from the UK experience is that reporting the gender pay gap has the potential to create discomfort for employers.

Reputation effect

On the positive side, most businesses in Ireland are welcoming the proposed legislation – showing a willingness to tackle gender imbalances.

According to a Mercer study, 74% of companies believe that mandatory reporting of the gender pay gap is a good thing because it increases transparency. There is a willingness to engage, although mixed with concern: 55% say they are not quite ready for mandatory reporting and 67% are concerned about the effect on reputation.

To get ahead of the problem (and because it’s a sane thing to do anyway), companies should start both identifying their gender pay gap and developing policies to address it. both pay equity and career.

It’s not just about complying with the law, but also about achieving a fairer and more inclusive working environment, with all the benefits that companies themselves should bring.

Ultimately, mandatory reporting of the gender pay gap can reveal inequalities. This inequity is not likely to be any less painful and damaging, for it is not, in many cases, completely unintentional.

Reporting on the gender pay gap does not by itself tackle the root causes or provide easy solutions. This is where the obligation, contained in the legislation, for companies to disclose their plans to resolve the problem becomes interesting.

The gender pay gap is not a cause, but a symptom, of an underlying problem: unequal career progression for men and women. Therefore, a plan that simply states the intention to reduce the gender pay gap will not provide a meaningful solution.

Organizations looking to properly tackle the problem should look at the journey of employees, from the hiring process, to performance review and selection of candidates for promotion. A good plan of action might include goals for diversity and inclusion as well as compensation, as well as adopting family-friendly work practices and gender career equity policies.

Mandatory gender pay gap reporting requires recognition of the reality of the gender pay gap. It’s a positive start. But the report itself should only be the start of a more holistic approach to tackling the gender imbalance.

Danny Mansergh is Head of Mercer Ireland’s Career Division


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