What construction companies need to know in advance of mandatory gender pay gap reporting in Ireland

by | Oct 29, 2021

Gender pay gap reporting is now mandatory in Ireland. On July 13, 2021, the Irish Government introduced gender pay gap reporting as a legal requirement in Ireland with the signing into law of the Gender Pay Gap Information Act 2021. Exact dates are not yet available for when mandatory reporting will commence in Ireland.

These will be set out in the regulations expected to be issued before the end of the year. However, based on UK experience, we would recommend that organisations start preparing now to ensure that they understand the level of any pay gaps, the reasons behind them and any actions which need to be taken.

Understanding the reasons behind any pay gap will be key. In recent years, the construction industry has taken a number of steps to increase diversity, understanding and effectively communicating any gender pay gaps will be an important step in that diversity journey. At its simplest, the gender pay gap is the difference between the average wages of men and women.

The drivers of a gap are typically diversity and demographic factors such as the distribution of men and women across the levels of seniority. This is different to the situation where there are differences in pay between men and women performing equal work – this is prohibited under legislation.

Men and women must be paid equally for ‘like work’, ‘work of equal value’ or ‘work rated as equivalent’. The aim of gender pay gap reporting is to create greater transparency and awareness of the factors contributing to the gap, so that it can be closed. This transparency will enable current employees, potential employees and other stakeholders to compare industries and organisations. It can also be an opportunity for an organisation to enhance its reputation as a fair and equitable employer, with the wider benefits that the enhanced reputation brings.

Based on equivalent disclosures in the UK, many organisations in the construction sector will be expected to have a gender pay gap and as a consequence it will be important that:

• The factors driving the gap are understood
• There is an action plan to close the gap

A gender pay gap can arise for many reasons and some of these are outside of an employer’s direct control.

 

The key factors include:

• Occupational segregation: Some higher paying occupations are often male dominated, for example, engineering; women may often work in sectors and occupations that are lower paying partly because these offer greater job flexibility.

• The underrepresentation of women in senior higher paying positions: This is a factor across many industries and can be addressed within an organisation through a range of initiatives.

• Differences in work-life patterns: Many women spend more time out of the workforce than men to have children and/or to care for their family, either via career breaks or by working part-time or fewer hours. Spending time out of work can mean that opportunities to progress are reduced.

In terms of taking action to close any gender pay gap, organisations will differ in their approach and it will depend on an understanding of why any gaps are arising. For the construction sector the focus may be on breaking down ‘occupational segregation’ which may require an industry-wide initiative; whereas for other sectors the focus may be on getting more women into senior jobs. Much has been written about various actions which could be taken and they tend to fall into the following categories:

• Recruitment – consider mix of any shortlist; use skills-based assessments; structured interviews; recruiting of women returning to the workforce
• Retention/promotion – transparency in promotion and reward process; implement mentoring and sponsorship programmes
• Diversity and inclusion – appoint a senior individual to monitor and be empowered to promote diversity in the organisation
• Improve workplace flexibility – for both men and women

The Covid crisis has meant that the construction industry had been on hold for a significant period. But with business gradually being restored to normal there is a focus on what the future of work will look like and flexibility will be a key feature for many organisations. While there are many roles in the construction space which cannot be done remotely, there may be alternative ways to promote and encourage agile working practices where possible.

Five key actions businesses can take now

Regardless of an organisation’s track record on diversity and inclusion to date, the impetus for Irish employers to be proactive now is clear. Reflecting on experiences in the UK, we believe that the key lessons for Irish employers are:

1. Start early and allow enough time

Getting a head start makes sense for a range of reasons:
• Ensuring data availability and accuracy; assessing capability to carry out the calculations
• It will be important to have the time to understand why any pay gap exists so that the right actions can be developed and taken to close it
• Gender pay gap reporting may identify areas of concern in relation to equal pay issues
• Time is needed to develop and embed solutions, which are likely to be longerterm in nature
• Securing buy-in at a senior level early in the process is crucial for both the reporting element as well as longer term action planning

2. Develop your narrative and action plan

Gender pay gap reporting can be a complex and emotive subject; organisations can avoid the potential misinterpretation of their data and negative PR by taking time to develop a narrative report to explain their results and to educate stakeholders about gender pay gap reporting.

3. Communicate proactively to all stakeholders

Communicating to all stakeholders is vital, particularly employees, and timing is key. For example, some organisations in the UK did not communicate to their employees before their results were made public which had a negative effect on employee engagement, morale and
productivity.

Tailoring your narrative to your specific stakeholders will also be important. Although key messages should be consistent, it is likely that the message to your board, for example, will have a different focus to that intended for employees. Take the time to develop the right messages for each stakeholder group.

4. Take action to close the gap and communicate as you execute

Gender pay gap reporting on an annual basis will mean that there is regularly available information to track progress. Most organisations will embrace the opportunity to take action. Once figures are reported (or before if possible), put in place a realistic plan that can be actioned in time for the following year’s reporting and report regularly on progress to internal stakeholders.

Your plan may include a broader review of pay structures, the introduction of a job evaluation scheme, etc. You may also come under pressure, as many UK employers did, to analyse other non-mandatory pay gaps e.g. race. Many of these activities will take time so it will be important to manage stakeholders’ expectations around timelines. Regular communications will provide an opportunity to engage stakeholders on an ongoing basis and should support more positive responses to subsequent results.

5. Consider sector collaboration

Certain sectors (e.g. construction, insurance) may have particularly large gender pay gaps as a result of occupational segregation i.e. men and women undertaking different types of role. Organisations may wish to collaborate on D&I initiatives to improve their attractiveness as a sector, for example, partnering with third level institutions to encourage women to undertake STEM qualifications.

About the authors

Anna Kinsella

Anna Kinsella

Anna is a director in PwC Ireland’s People and Organisation practice. She is part of the PwC global network for gender pay gap reporting and diversity and inclusion, identifying best practices and emerging global trends.

 

 

 

Aoife Kilmurray

Aoife Kilmurray

Aoife is a director in PwC Ireland’s People and Organisation group. She works with clients across all sectors in calculating their gender pay gap numbers and analysing causes, trends and impact at both a local and global level.

 

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