Employers have begun taking steps to comply with new mandatory pay reporting requirements that will come into force in June 2026 under the EU Pay Transparency Directive.
Larger companies in Ireland, those with 250 or more staff, have been reporting on gender-based pay transparency since 2022. From 2026, the directive will introduce a range of new obligations for employers of all sizes.
While each EU member state will have leeway to determine their own rules, the EU is suggesting that some kinds of non-compliance be punishable with fines.
Oliver Coakley, director with Citris Rewards Consulting, said: “The Directive will drive huge change in the Irish marketplace. It will bring a huge focus to all organisations on their publishing of information around pay equality.
“They will need to report on gender pay equality and any equality pay gaps between male and female workers doing similar job categories. The new regulations will shine a spotlight on any organisations that don’t have proper processes in place.”
Citris Rewards Consulting provides a range of reward consulting services to help organisations with all aspects of their compensation and benefits programmes.
Mr Coakley says there is significant awareness among the clients he advises of the changing pay reporting environment. While women in Ireland earn around 10% less than men, this compares favourably with an EU average gender pay gap of around 14%.
However, a recent Citris survey of 500 organisations in Ireland who have published their 2023 reports has found that the pay gaps vary significantly from one industry to another.
Ireland’s legal (54.7%), banking (23.9%), engineering (21.9%), insurance (21.9%) and construction (20.6%) sectors have the highest gaps. In contrast, consumer goods (3.2%), public sector (3.9%), charities (4.6%), hospitality (7.4%) and retail (8.5%) have the lowest gender pay gaps.
Overall, Ireland’s average gender pay gap of 11.2% for 2023 is better than the 12.3% gap in 2022. While this average hides huge difference between industries, these variances do at least have some fairly benign explanations.
“If you look at those professions with the biggest gender pay gaps, they have a higher concentration of STEM roles. In general terms, around 70% of STEM roles are filled by male workers,” said Oliver Coakley. “If that is the pool of talent that you are drawing from, then you’re not going to get a 50:50 gender pay balance.
“Many organisations are looking to improve their gender balance at executive level. Some are making faster progress than others. All of my clients see this as a priority because they are very aware of the reputational risks. Many candidates just won’t apply to join organisations with gender pay gaps.”
Mr Coakley said that all organisations that are taking this topic seriously are appointing “executives with teeth” — robust leaders who are making management accountable to deliver measurable change.
The Citris survey shows that almost all industry sectors have made progress on reducing gender pay gaps over the course of 2023.
One exception to this is the legal sector, where the average mean gender pay gap, including equity partners, has increased from 53.5% in 2022 to 54.7% in 2023.
The analysis shows reductions in pay gaps across both public (reduced by 1.2%) and private sector (reduced by 1.0%) organisations. While this is an encouraging trend, it is against a backdrop where the average pay of men is still greater than the average pay of women at 86% of organisations.
“Whilst small in the context of the size of the overall pay gap, this is a positive development. It demonstrates the positive impact that greater levels of pay transparency and disclosure is intended to create,” said Oliver Coakley.
At Ireland’s largest listed companies, as represented by the ISEQ 20, the gender pay gap is greater than across the broader private sector (18.6% versus 12.9%).
- The pay gap has reduced in 60% of the organisations included in the Citris analysis but it has increased or is unchanged in the remaining 40% of organisations.
- Almost 20% of organizations (one in five) have a gender pay gap of 20% or more.
- Fifteen organisations have a gender pay gap in excess of 40% (mainly in the legal, financial and construction sectors).
Oliver Coakley noted: “Whilst companies can significantly reduce gender pay gaps with very specific and targeted actions, a much broader approach is needed to tackle some of the underlying societal factors.
“This will require the collaboration of all relevant stakeholders, including businesses, their representative bodies, educational institutions and government.
“The good news is that we can leverage some of the learnings from other countries, both in terms of action planning which is proven to be effective in addressing gender pay gaps as well as government policies which can make a positive impact,” he said.
