31 December 2022 marked the close of the first reporting period under the Gender Pay Gap Information Act 2021. To date, more than 500 companies have disclosed their figures.
With the first reporting window now closed, we can gain a clear sense of the gender pay gap for Ireland’s key employers. Our analysis reveals a mean gender pay gap of 12.6% across the organisations that published reports in December 2022. This compares to the most recently available data on Ireland’s national pay gap of 11.3% (2019) and an EU average gender pay gap of 13% (2020).*
* Source: Eurostat.
At a high level, the gender pay gap is the difference in the average hourly wage of all males and all females in an organisation. A gender pay gap does not infer an absence of equal pay for equal work, which is a legal requirement in Ireland. Instead, it is typically a result of unequal gender representation at different organisational levels.
The gender pay gaps published in December 2022 were widest in the finance, banking/insurance and construction sectors. For example, based on our review of recently published gender pay gap reports, it is estimated that the mean hourly pay gap for the insurance sector is 21.1%, nearly twice the national average.
Although the exact reason for the gap varies by company and sector, a key factor appears to be the relatively high number of males in more senior (and so, more highly paid) roles.
At the other end of the scale, retailers, health and charity organisations were most likely to have a larger proportion of females in higher-paid roles. Based on our analysis, the mean hourly pay gap for the charity sector is approximately 1.7%, with females comprising about two-thirds of the overall workforce and those in the upper pay quartile.
Delving into the gender pay gap detail
Workforce participation
Based on our analysis of the companies that published their gender pay gap results in December 2022, the average reported proportion of females in the workforce is 45%. The ratio of females to males tends to be lowest in the engineering, construction, manufacturing and technology sectors. Conversely, the healthcare and retail sectors have a much higher ratio of females to males.
Gender representation
Although the exact reason for a gender pay gap varies by company and sector, a key factor appears to be the relatively high number of males in more senior (and so, more highly paid) roles. The strong implication of a national gender pay gap is that far more females are in more junior, lower-paid roles. In contrast, more males are employed in senior management and high-paying positions.
The requirement for companies to disclose the proportion of males and females in each pay quartile helps us understand the representation of males and females across an organisation. Regarding disclosures on pay quartiles, 75% of companies appear to show a higher relative proportion of males in the ‘highest paid’ quartile. The more males a company has in these top quartiles relative to the number of females, the higher that company’s pay gap is likely to be.
The issue of representation is also reflected in the bonus gap figures. The mean bonus gap considers the monetary value of bonuses earned by males compared to females. The mean bonus gap across the companies we analysed was 22.9%, reflecting the representation of males in senior roles, which in turn is linked to higher bonus payments.
Sector influence
Another aspect that appears to strongly influence the likely pay gap of a company is the sector in which it operates. We know, for example, that several sectors have much higher gaps—financial services, construction and law, for example. This sectoral influence will likely make addressing any gap more challenging in the short- to medium-term. It is more likely that the industry’s reputation may not be positive, making it harder for employers to encourage talented women to join and prosper in their organisations.
In some instances, these sectoral dynamics reflect wider societal issues as opposed to conundrums a company or individual sector can solve alone. For example, science, technology, engineering and mathematics (STEM) fields historically attract fewer women than men. The drop-off in interest by women in STEM subjects is reported to start at Leaving Certificate level, with the gender gap continuing through college and into workplaces.
The key actions to take now
Notwithstanding the size of the gender pay gap in companies or across sectors, the legislation has achieved its objective of requiring companies to be more transparent about their gap and outline what they are doing to fix it.
With the first year of reporting behind them, some companies may feel that the biggest challenge of gender pay gap reporting has been overcome. In fact, this is just the beginning. The December 2022 report was the first step in a challenging journey to foster diversity and inclusion in our workplaces. Businesses will have to file their 2023 reports in December 2023 based on their snapshot from June 2023. Smaller organisations with 150 or more employees will have to report from 2024 onwards.
Organisations that wish to lead in this area must act now to ensure they are prepared for the future. Several companies have set specific targets for the representation of women in senior roles in their organisations. Meanwhile, others have committed to reviewing and improving recruitment and parental leave policies or introducing new initiatives such as unconscious bias training.
This transparency is to be welcomed, as is the focus that many companies are putting on closing the gender pay and bonus gap. This will be a considerable challenge, particularly for those in sectors with large gaps. Progress will require a concerted effort that is enabled by HR but led by business leaders to improve the representation of women in their businesses.
There is no silver bullet, but five key features support successful progress in this area.
❛❛Progress will require a concerted effort that is enabled by HR, but led by business leaders, to make active changes to improve the representation of women in their businesses.❜❜
Business-led action
it is crucial that business leaders actively support and lead any diversity commitments and activities and that they clearly link to a well-articulated business case for change.
Make diversity and inclusion (D&I) a key item on your agenda
Embedding sustainable and authentic change is driven by organisational values. Critically analysing existing organisational practices, progression opportunities, advertisements and reward procedures, for example, is essential to address internal issues that potentially impact your gender pay gap.
Evidence-driven
It is important to understand how you operate now in order to understand what needs to change. Use employee analytics to understand where your organisation’s diversity focus should be, both now and in the future.
HR-supported
Although business leadership is crucial, the right HR policies and processes must be in place to encourage behavioural change. Checks and balances in core HR processes like recruitment and promotion can help manage the risk of bias in decision-making and improve reporting. As organisations struggle to attract and retain talent, flexibility, work-life balance and adaptive leadership play critical roles in talent management.
Input-focused, outcome-driven
Whether targets are introduced or not, leading companies are thinking about more effective ways to measure improvements in D&I through business KPIs and dashboards. A robust action plan supported by strong reporting can help business leaders understand what activity is needed to drive change and measure their progress in achieving it.
We are here to help you
For those organisations embracing diversity, equity and inclusion (DE&I), gender pay gap reporting presents an opportunity to strengthen their brand by promoting their efforts publicly. For those yet to embrace the topic, it provides a chance to understand the reality in their organisation, why a gender pay gap exists and what is driving it. They can then begin to make data-informed decisions. Our team is here to help you as you work through the process. Contact us today.
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