MANY Irish employers will have breathed a quiet sigh of relief following the publication of their gender pay-gap reports last year.

Despite a significant disparity in results, ranging from small pay gaps of up to 10pc in favour of women to large ones of 60pc in favour of men, the reaction from employees has been relatively muted.

It may be that employers did a good job of explaining the reasons for their gender pay gaps and the actions they are taking to address them. It may also be that employees were sufficiently intuitive about their working environment to find the results unsurprising.

A Mercer review of a large sample of reports shows results were in line with what Eurostat had previously published for Ireland – a gap, on average, of 13pc. The Eurostat figure was based on the entire workforce. The reports most recently published covered only organisations with 250-plus employees, so it is of some interest to see there is no appreciable difference.

There is extensive discussion in most reports as to how gender pay gaps have arisen. Many employers point out that pay equity – equal pay for equal work – and the gender pay gap are two very different things. It is perfectly possible for an organisation to have a very large gender pay gap and yet be paying people fairly, without gender discrimination, at the level of particular jobs.

This situation most often arises where there are proportionately more men in senior roles and proportionately more women in entry-level roles, though there can be other explanations.

Most employers, however, accept that the “our gender pay gap doesn’t mean we pay inequitably” argument does not satisfactorily conclude the discussion. In many gender pay-gap reports, there is also extensive detail given about things like equality of hiring and career progression. Some firms go so far as to commit to public goals around the proportion of women in specialist or leadership positions.

Effectively, the discussion is moved from pay equity – most employers insist they already have this – to the objective of more even gender representation in different roles. Most employers say they are aiming for this.

Our data, gathered from the 195 Irish organisations that participated in Mercer’s 2022 Total Remuneration Survey, offers interesting insights. In the firms surveyed, there is an overall split of 41pc women and 59pc men. It shows that the higher the career level, the fewer women are represented. The 41pc overall female representation slips to 37pc at senior manager level and falls to 28pc at executive levels.

Ireland is not unique here as the figures are fairly similar across the EU. So far, so much in line with the argument typically made in gender pay-gap reports that there is a problem of representation.

Troublingly, the data also shows that average pay gaps exist within the different levels defined by our survey, and that the gender pay gap worsens towards the top of the hierarchy. A gender pay gap of 5pc at junior levels rises to 12pc at executive level. This is best regarded as a tentative indicator rather than hard evidence.

It could be that our aggregate data does not give a picture that translates neatly to the state of play within individual organisations. But the possibility cannot be ignored that there is pay inequity within broad career levels at many organisations, despite employer protestations to the contrary. Alternatively (or additionally), the uneven representation problem may be pervasive, not just within organisations as a whole but within each level.

Soon, employers may have to show that what they are asserting on pay equity is actually true. The EU will issue the Equal Pay and Pay Transparency Directive in the coming months. It is likely to give job applicants and incumbents the right to see pay ranges, averages and norms for their roles.

The directive will demand evidence for employer assertions that pay is equitable despite the existence of a gender pay gap. In any role or level showing a gender pay gap exceeding 5pc, further analysis to prove the point around pay equity is likely to be required.

Depending on the results of that analysis, employers may find themselves under an obligation to discuss remedial measures with workers’ representatives. The directive is most likely to be issued in 2023, to have force in member states from 2026, with first reporting in 2027.

Currently, employers are insistent that they pay equitably. The time is coming when they will have to prove it.

Danny Mansergh is head of Mercer Ireland’s career practice, which helps firms remedy gender pay gaps.