Your payroll function forms the foundation of your organisation’s rewards and benefits system. It is also reflective of your EVP or Employee Value Proposition. A well-defined EVP highlights your key strengths as a place to work and defines the specific qualities which distinguish you from your competitors when it comes to recruitment and keeping your best people. In essence, this means that your payroll is a reflection of your worth as an employer.
Disparities in pay have a way of highlighting biases within your organisation. Whilst tiers of pay based on factors such as performance are widely encouraged, to have gaps in pay for factors out of a person’s control such as their ethnic background or sexual orientation, serves only to raise worrying questions about their place of work.
Many of these disparities- particularly gender pay gaps- are rooted in older, outdated attitudes and indicative of certain biases. Organisations may feel that these gaps represent attitudes which do not align with their contemporary values and to that end, it is in their interest to gain a clear understanding of where and why gaps in pay exist within their structure.
The need to gain that insight into pay structures is a driving factor behind organisations widening the legal obligation for gender pay gap reporting to include broader diversity metrics. We’ve previously discussed how your HR systems can help you achieve excellence in your pay gap reporting but what about solutions closer to home? After all, when looking at pay and considering where changes may need to be made, it stands to reason that your payroll systems should be your first port of call.
In this article, we will be examining how Advanced Payroll can help HR and payroll teams close their pay gap report and give your people teams access to the insights and data points they need to create a plan for sustained success moving forward.
What are diversity pay gaps?
Pay gaps are indicators of systemic and often well-embedded biases related to diversity and inclusion. More specifically, they are the measure of the percentage in average hourly pay difference between specific groups within an organisation. Gaps can exist between genders, sexualities, individuals with disabilities or different ethnicities and are generally considered to be indicative of outdated societal attitudes and biases.
Since 2015, there have been legal requirements in place for organisations to disclose information around their gender pay gaps, often in the form of annual reporting. Many organisations, such as The PWC use this reporting period to disclose more information than is legally obligated- publishing information on ethnic, disability, and sexual orientation-related pay gaps.
Failure to identify gaps in pay and demonstrate an ongoing commitment to closing gaps carries a much greater risk than those just posed by noncompliance with reporting. Diversity pay gaps highlight existing biases and inequalities within your organisation which existing employees and prospective new hires may judge you by.
How can Advanced Payroll help?
With gender pay gap reporting now an annual responsibility for many organisations as well as there being a greater need to highlight and understand broader incidences of pay disparity, there will undoubtedly be a greater degree of scrutiny falling upon pay solutions.
Traditionally speaking, the requirements for a payroll system seem fairly simplistic in nature- ensure that you can pay your people accurately and on time and chances are, you won’t have too many complaints. Increasingly, however, people teams are finding themselves being called upon to take more active roles in guiding ongoing business strategy- particularly in areas that pertain to company culture and employee engagement and wellbeing.
This shift in scope means that these baseline requirements for systems and technology are suddenly no longer fit for purpose. Having a fundamental level of accuracy in your pay processes is obviously a priority but have you taken the time to consider how the solutions you rely upon daily can help you gain access to the insights you need to drive success?
We created Advanced Payroll specifically to help tackle challenges facing payroll professionals day in and day out. We’ve taken on board the experiences of people working in the field in order to craft a solution that can free payroll teams from the burden of admin-heavy tasks and allow them to leverage their skills in more meaningful ways.
By eliminating the need to spend hours each working day troubleshooting and correcting errors that come naturally alongside manual input, Advanced Payroll gives time back to your pay teams, meaning they can focus on taking a more active approach in influencing your pay gap reporting processing and using the data harnessed to action meaningful change.
So what exactly can Advanced Payroll help you achieve?
- Real time payroll - Advanced Payroll’s real-time pay functionality allows you to accommodate for every change and run payroll at the very last minute, meaning your people avoid any roadblocks or delays in achieving their proper pay. Not only does this ensure that your people are being paid accurately with each and every pay cycle, but you also have the peace of mind to understand that the information you are pulling from your payroll is accurate up to the last second.
- Reporting- Gain unparalleled insight into your organisation and build out detailed reports which can highlight any potential disparities in wages. Alongside the accuracy offered by real-time pay functionality, you can build the most accurate picture of your existing pay structure possible. Our reporting is fully customisable, allowing you to tailor fields and dashboards to gain a granular view of all aspects of the pay cycle.
- Become more proactive – The strength of more complex and robust pay gap reporting is that it empowers your payroll teams to take a more proactive approach in formulating strategy. Highlighting pay gaps also offers you the ability to identify other hotspots of concern such as turnover spikes or performance and take steps to deal with them, rather than having to rely on gut feelings or instinct.
- Compliance- Of course, pay gap reporting simply represents one element of the broader scope of payroll compliance. Payroll teams already face a huge burden in ensuring compliance, with failure to adhere to regulations carrying the potential for severe legal and financial penalties. As a fully GDPR-compliant solution, Advanced Payroll takes the burden off your hands, being able to effortlessly account for most changes in requirements ensuring you remain compliant with even the most immediate legislative shifts.
- Automation- Avoid becoming saturated with repetitive tasks which can be easily automated. Advanced Payroll takes the strain for you, with our gross-to-net instant calculator, pension auto-enrolment and P11D processing functionality meaning that you don’t have to worry about losing precious hours each working day to manual checks- freeing your time to focus on driving change through your pay gap reports.
- Back pay- The automatic back pay function allows users to calculate back pay when late notification of pay awards is given, requiring less manual effort and intervention by your payroll team. Our automated payroll software will also reduce error rates, removing the risk of wage violation cases against you as an employer.
What’s next?
Pay gap reporting is a worthy goal for any business and the main reason that organisations independently make the decision to go that one step further and broaden their gender pay gap reporting out to wider diversity metrics, is that they believe in the transformative possibilities afforded to them by the information gathered.
Whilst the overarching goal for any pay gap reporting is obviously going to be to reduce incidences of pay disparity, it also offers organisations the ability to highlight other gaps in their processes or areas of concern which may need to be addressed.
As with any process, your pay gap reporting will only be as effective as the mechanisms you have in place to gather data. It’s perhaps easy to overlook the significance of your payroll solutions in helping you reduce incidences of pay disparity but when you get down to it, effective reporting should already serve as a cornerstone of your existing offering.
Furthermore, the ability to leverage data offered through your pay gap reporting and taking the next step to transforming it into actionable strategy can only happen if your payroll teams are able to leverage their time and talents in an appropriate fashion. Older, more rigid payroll systems can make these aspirational goals almost impossible, with manual inputs and admin heavy tasks demanding far too much of your people’s time.
Advanced Payroll offers you the scalability and flexibility you need to completely transform the way in which you run payroll. Capable of working effortlessly across multiple sites and pay grades, whether operating as a standalone system or integrated with our Time and Attendance, HR and Access Control solutions to form a comprehensive Workforce Management suite- Advanced Payroll helps you process payroll efficiently.
Our solution gives you the comprehensive reporting, GDPR auto-processing and audit trail capability you need to have peace of mind that your payroll is being run accurately and in a compliant fashion month in and month out.
If you’d like to discover more about how Advanced Payroll can help you achieve more effective pay gap reporting, get in touch today.