Businesses left ‘in limbo’ as deadline looms for pay data

A lack of manpower to deal with onerous gender pay gap regulations could cause reputational damager to small and mid-sized oil and gas firms, says international law firm Pinsent Masons.

At least 83 exploration and production and services businesses with a combined turnover of £405.5 billion will have to publicly reveal female and male employees’ salaries and bonuses when gender pay gap regulation come into force in early 2017.

The new rules, issued this week by the Government, apply to all businesses with more than 250 employees and from 2018 a league table outlining the gender pay gap across UK companies will be made public.

Major international O&G players with sophisticated payroll systems and large HR teams are well-equipped to compile the data required to meet the new rules, but employment specialist at Pinsent Mason claim businesses of between 250 and 400 staff may fall foul of technical reporting requirements - leaving them exposed to reputational damage should they be named publicly for not providing adequate information.

Pinsent Masons employment partner, Katie Williams, said: “After a sustained period of heavy cost reduction prompted by long term oil price volatility, those businesses just above the threshold will be squeezed by these new rules. Many of the leaner O&G players have limited manpower with just one or two-person HR teams, which makes compliance a resource-draining task.

“The reality is that the O&G industry has had its hands full with the more pressing issues of restructuring, cost cutting and increased competition for winning new contracts and projects.

“This is compounded by the delay in publication of the final regulation, leaving HR teams in limbo without the necessary detail. The looming April deadline for snap shot data for the entire workforce means action must be taken and fast.

“It’s no secret that the oil and gas industry is largely male dominated, with the majority of technical, engineering and the wider range of offshore roles occupied by men. The disparity of pay between these jobs and those across the back-office, typically occupied by women, has long been a challenge that leading O&G companies have grappled with.”

Williams added that smaller businesses require support in tackling this embedded norm across the industry, with communicating the causes of the gender pay gap to the wider community crucial to the long-term reputation of UK hydrocarbon sector.

“While its right that businesses take their share of responsibility for the pay gap must look more closely at why fewer women occupy technical roles in the first place and there is a need to encourage more young women into science-based topics during the early stages of schooling. Ultimately, prevention rather than cure will be the key to reducing the gender pay gap.”