The BBC pay report: You are now entering an era of transparency
Esther Smith, July 21, 2017
Publication of the BBC's pay report may be a milestone on the way to greater pay transparency generally
The BBC has stolen the headlines by publishing information about which actors, presenters, journalists and panellists it pays more than £150,000 per annum. It has been the topic of much debate among the public, the business community, and the media.
Pay and benefits have historically been regarded as a private matter between individuals and their employers. But this could be coming to an end. While publicly-listed companies have been obliged to publish information about their directors' remuneration for some time, the BBC was responding to the government's 11-year charter and an increasing expectation from society for transparency.
Organisations are increasingly bowing to societal pressures for greater transparency, particularly where that organisation is publicly funded or in an industry that people feel should be held publicly accountable, such as the public health and charity sectors.
Stories like this could start to become commonplace. With the implementation of the Gender Pay Regulations earlier this year all private companies with more than 250 employees will find themselves having to publish much more pay information than previously. They don't have to disclose the salaries of their top earners, but are obliged to publish detailed information about their gender pay gap in relation to hourly pay and bonus pay.
They may use the opportunity to share details about how they plan to address any gender inequality in their business. Many organisations are not currently in a position to do this, but the clock is ticking and it pays to think ahead.
The press and the public have shown increasing interest in the compliance, or non-compliance, of household name employers with employment legislation. But what we are seeing with the recent regulations on gender pay (and Theresa May has made noises about extending the same approach to racial pay information) is a form of regulation that is not enforced through individual action by employees or trade unions – indeed there are no enforcement provisions in the Gender Pay Regulations. Instead, the government's view is that employers will do the right thing because they should or because they fear being 'named and shamed'.
While the BBC's reported gender pay gap of 10% is significantly less than the national average (19%), there is clearly a gender pay issue in the UK as a whole and the campaign for greater transparency is gaining momentum. When organisations object to the forced disclosure of pay data the common response is "what have you got to hide?". The flipside is concerns about pay inflation (as both male and female staff demand to be paid as much as their colleagues), poaching, and the difficulty of ignoring the market.
The transition to transparency may not be an easy or comfortable one for an organisation to make, and businesses in the public eye will need to consider how they address this for the short- and longer-term. But one thing is clear – this may well be the shape of things to come.
Esther Smith is a partner at UK law firm TLT