Gender pay gap reporting – what candidates will want to know

Employers with 250 or more employees will be obliged to publish information about their gender pay gap by 26 March 2016. The Government launched a consultation on closing the gender pay gap in July 2015. The consultation closed in September 2015 and we are still awaiting the outcome of that consultation and the draft legislation setting out how these obligations will apply.

The Government has now confirmed that employers will be required to include bonus information in their gender pay gap reporting.

The Government has also announced its intention to work with businesses to eliminate all-male boards in the FTSE 350. As at 1 October 2015, there were no male-only boards in the FTSE 100 and women held 26.1% of board positions in those companies.

It will be interesting to see the extent of the obligation to report on the gender pay gap and how employers will deal with this. Candidates are likely to be increasingly interested in pay information, particularly if they are female or from an ethnic minority group. Those employers who disclose information evidencing a significant gender pay gap are likely to find it harder to recruit female talent, as the gender pay gap information will essentially raise a red flag to female candidates that they may be treated less favourably than their male counterparts. Arguably, to counteract that, a client seeking to increase female representation may have to offer a more generous starting package, in order to make that offer more attractive to a female candidate.

Similarly, it is arguable that the public policy drive to increase representation of women on boards may have the effect of increasing the competition for female candidates and may lead to more generous starting salaries. The same is likely to apply to those from ethnic minority groups.