Fair pay for a great job done is one of the fundamentals of a successful business. It motivates your staff, increases productivity, helps retention and improves your employer brand.

No company can prosper with employees who feel they’re underpaid and under-appreciated – or if managers have no over-arching visibility into the impact of pay policy.

Gain complete visibility

Pay transparency allows you to gain a complete picture of how your business rewards its people, with important benefits for compliance as well as the bottom line.

Key to pay transparency is an integrated payroll and HR system which feeds real-time data from your HR system into payroll for accuracy and simplicity.

With reporting and analytics software you can generate comprehensive reports that show pay breakdown by experience, age and gender.

Gender pay gap reporting

Reporting on your company’s gender pay gap is not only a legal requirement if you have more than 250 employees, it can have repercussions for your brand.

The gender pay gap is the difference between the average pay of men and women in an organisation and in 2022 the UK average gender pay among all employees, full time and part time, was 14.9%.

The national statistics throw up some interesting anomalies. For example, the profession where women do best is dance and choreography where the pay gap is 36% in their favour, but they do worst in waste disposal management, where men are paid 34% more.

Named and shamed

Failure to report gender pay gap data on time, or reporting inaccurate data, can lead to court orders and fines. There is also the reputational risk of being named and shamed on the Government’s gender pay gap service.

Pay transparency through an integrated payroll and HR system also allows you to carry out ethnicity pay gap reporting – the difference in average pay between white and BAME staff. The reporting methodology is the same as for gender pay reporting.

This transparency is pivotal to helping businesses devise and execute targeted actions to reduce both pay gaps, which can often be a challenge.

An example is the CIPD, the professional body for HR and people development, which in 2022 reported that its ethnicity pay gap had increased from 11.2% to 14.5%. “Even though we have clear externally benchmarked salary ranges in place for all jobs, to ensure that everyone is paid fairly for undertaking the same or a similar role, it’s still possible to have an ethnicity pay gap,” it reported.

Pay transparency and reporting through an integrated HR and payroll system is a vital first step to rectifying this.

Equal pay for equal work

Pay transparency also helps companies do their part to promote National Equal Pay Day, an annual campaign for equal pay for equal work.

It marks the day in the year when women finally catch up with how much men earned the year before. In 2023 this fell on 11 April.

It is also important to monitor age and experience to ensure you are not losing company know-how (“institutional memory“) as old hands are replaced by new recruits.

As an example, the UK police force has recruited 20,000 new officers in the last three years but they do not have the expertise of the c. 20,000 officers who left from 2010 to 2019.

You can also generate a payroll report that shows an employee’s most recent performance rating as well as name and salary, one way that companies might evaluate the value for money they are getting from their workforce.

Know more on the topic

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More advantages of integrated HR and payroll

There are many more advantages of having a fully integrated HR and payroll:

  • Automated processes for better data accuracy and security.
  • Less manual workload, burdensome paperwork and human error.
  • Data that is more accessible and usable by the whole business.
  • No need to waste time searching for missing data.
  • Improved employee experience. Employee self-service means staff have all their information at their fingertips.
  • Happier, high-performing and cost-effective employees.
  • Help retain staff by ensuring they are paid fairly for work done.
  • Avoid mistakes that damage your employer brand.

This post was written by Zalaris. They are an exhibitor on the HRTech247 Payroll, Time & Attendance floor in the technology hall here, and the SAP Partners floor in the Partners Hall here.