Gender Pay Gap Reporting 2020: A new dawn for finance?

While the results of the 2019 gender pay gap filings are (still) being processed across the business community, the 2020 snapshots will mark everyone’s progress– especially for those companies that committed to hitting new gender pay gap targets. Now that we face a new decade, there is more pressure on the companies involved to a) meet new targets, b) tell the right story around the data, and c) report the right numbers in a timely way. In the UK, the deadlines for submitting Gender Pay Gap reports in 2020 are the 30th March if you are a public company, and 4th April if you are a private company. In 2019, approximately 1,500 British companies filed late, and 25% of organisations filed within 36 hours of the deadline. That means the reporting process is still evolving and is meeting snags along the way. It’s no secret that getting to grips with the reporting process ensures better due diligence of the all-important numbers, and lower stress levels for everyone involved. Collaboration comes first The gender pay gap legislation requires a finance team to work with HR to deliver a gender pay gap report—without errors—in a timely fashion. Both sets of departments have what the other requires. HR has employee oversight and access to the data on file. The finance team possess the analytical skills to make sense of it in the way the UK government needs, but it doesn’t have certain employee-level data for confidentiality reasons. This means a few things need to happen. The right people need assigning to the project to ensure data oversight, data responsibility, compliance and analysis—and those resources should work together collaboratively so all bases are covered. The gender pay gap process is a flagship example of how the finance team can use their skills and reporting methods to support other teams in their organisation. Data comes next Putting together a gender pay report requires impeccable record keeping. This process will certainly expose where the data gaps are, and the quality of said data. Each UK employer with staff numbers over 250 need to publish: Average gender pay gap as a mean average Average gender pay gap as a median average Average bonus gender pay gap as a mean average Average bonus gender pay gap as a median average Proportion of males receiving a bonus payment and proportion of females receiving a bonus payment Proportion of males and females when divided into four groups ordered from lowest to highest pay. It sounds straight-forward enough, but it becomes especially complex if payroll data is in one system of record, and bonus and compensation data is sitting elsewhere. Another potential problem is that finance teams report against general ledgers and sub-ledgers, which include a consolidated view of payroll and bonus totals, but don’t include employee-level data. This is why a repeatable, turnkey system needs constructing to deliver the right calculations. To do this, the most important step of all is that HR provides finance with the necessary data in an aggregated and anonymised format to keep everything compliant with data protection regulations. Therefore, finance must make sure HR understands what data it needs very early on. Tech comes after that On the tech side, this requires drilling down into multiple data sets. In the reporting world, calculations are only as good as the quality of the base data. To avoid errors in these final few months, there are a few things companies can do. Firstly, keep HR systems up-to-date. Employee start and end dates need to be updated regularly, and any other systems should be updated with the right bonus information, along with any relevant data around maternity leave, sick pay, or shift work that impacts an employee’s payslip. Secondly, technology—such as a financial reporting tool—is there to support the gender pay gap process by consolidating all the right data from each source system into a reporting layer and calculating the required metrics. This same software can also run regular integrity reports throughout the year to highlight any data that is missing and avoid any unwanted surprises as the filing deadline approaches. 2020: A year of progress? Once a finance team completes due diligence on all the numbers, they are presented to other company stakeholders. Preparations then begin on what story needs telling behind the numbers, how all metrics compare with the previous year, and what targets have been met. In this type of situation, finance teams are not just about number analysis, but financial intelligence for the entire organisation: They advise a non-financial audience on the story the numbers tell and become critical to external communications. 2020 marks the first time companies can track their own progress, and why certain numbers have increased, decreased, or stagnated. Discovering the story that needs telling requires a robust team and reporting system that work in sync with each other. Richard Sampson, SVP EMEA, Insightsoftware