Gender pay gaps: continuity or change, progress or push-back?

Blog posts

8 May 2024

Duncan Brown

Dr Duncan Brown, Principal Associate

With most people’s attention still focused on the size of the gap between our major political parties, evident in the voting patterns in last week’s local election results, I have been taking a look at some of the initial analyses of the wonderful wealth of new data entered onto the government’s gender pay gap reporting website for this sixth year of compulsory reporting.

The good news in last year's data, submitted by over 10,800 employers in the run up to April's annual deadline, is that the median gap has fallen to a record low of 9%, down from 9.2% the previous year. One cheer at least.

Unfortunately, that's in the context of some much less good news, evident in the figures for all of us proponents of achieving genuine pay equality. The national median gap was 9.3% when compulsory gender pay gap reporting was first introduced in 2017. So it will take my kids just about up to their retirement, almost 30 years, to close it at this current slow rate of progress. The mean gap, which perhaps better reflects the predominance of highly paid men at the top of the income distribution - and that two-thirds of those paid below a real living wage at the bottom end are female, remains in double digits at over 12%.

Three-quarters, or 78%, of these reporting employers still, on average, pay their male employees more than their female, ranging from 96% of macho mining firms, with the largest sector average median gap of 22% (a smidgeon ahead of the 21% average gap in ballsy banks), through to single digit differences in sectors such as the arts and recreation and health care.

'The pace of change is too slow' is the blindingly obvious conclusion, at least for those of us with daughters, drawn by Pavita Cooper chair of the 30% Club, which has done great work to drive female representation at board level (although mostly so far in the lower paying non-executive and support function roles). But at least some of our still mostly male chief executives seem blissfully unaware of this; and seem perhaps more concerned with comparative levels of remuneration well above their FTSE CEO £4 million packages on the other side of the Atlantic

Although you might think that the gender pay gap is a global problem, the UK's gap has been greater than the average for comparator countries in the OECD every year since GPG reporting came in. Median pay gaps have actually increased over the prior year at 185 of the 580 largest employers reporting here, for example from 32% to 37% at BA (in a sector with predominantly male, relatively highly paid pilots, and majority-female and lower-paid cabin crew); and the gap has more than doubled at retailer Next to 17.3%.

Contributing to an HR World webinar earlier this week which provocatively questioned more broadly across the equality, diversity and inclusion sphere whether organisations are sufficiently  ‘putting your money where your mouth is’, this somewhat mixed picture was confirmed by the other speakers and participants. Genuine progress on reducing gaps and wider inequalities reported by some employers was matched by others with ‘tokenistic’ and ineffective actions, and even a ‘woke-ist’ push-back and rejection of initiative such as Unconscious Bias Training (UBT) - UBT has been stopped in the NHS and other parts of government, for example.

But on the positive side, many of the recommendations from the review of the gender pay gap in medicine led by Surrey University which I contributed to on behalf of IES, have been implemented as part of the recently agreed consultant pay deal. Examples include shortening the lengthy service-related medical pay scales which generally favour longer-serving males.

The information and advice available from IES on our gender pay resource hub which was set up at the time that compulsory reporting was introduced remains useful and relevant. It can be boiled down into three summary tenets:

  • First, carefully study your own data and know the trends in it over the past six years (seven if you reported voluntarily during  the Covid-relayed suspension year), to really understand the causes of the gender pay gaps in your organisation.
  • Second, act on those causes, and recognise that it is likely that a broad range of HR and employment actions beyond just pay methods, particularly in the areas of recruitment and career management, will be required to address these multiple factors of causation.
  • Third, give it time and don’t expect to see significant reductions overnight.

On that third aspect of timing however, with each year of reporting and funereal-paced progress that passes certainly my own patience diminishes. We at IES would very much agree with Pavita Cooper that 'organisations need to accelerate efforts to address the systemic barriers that face women at all stages of their career'.

Pay gap reporting and UBT on their own were never going to address the widespread gender pay gaps and significant under-representation of women in senior and higher-paying roles, that are widespread in UK organisations. This more significant and structural set of actions now need to be taken by more employers to ensure continuing and faster progress, possibly too with further government pressure and support.

The Labour Party has committed to implement ethnicity and disability pay reporting, alongside stronger labour market enforcement, if its poll lead translates into a general election victory. Compulsory reporting of remedial actions and their impact, as supported originally by the Commons’ Women and Equalities Committee, and even penalties for employers where gaps increase significantly, might also need to be considered.

Alongside of this, IES would like to see pay range publication by all recruiting employers, and salary-history discussion bans in the UK. These actions form key elements of the pay transparency and equity legislation recently passed in the majority of US states and in the European Union’s directive.

Gender pay gaps, reflecting on such a variety of social as well as employment issues, were always going to be complex and difficult to close. Gender pay gap reporting has, if anything, possibly had more of an impact than we at IES originally anticipated when we originally inputted into the government’s regulations. But the evidence suggests that now both government and employers need to put more effort and resources into addressing the still significant and widespread gaps that remain if we are to see further and faster progress in their ultimate removal.

If you would like to discuss any issues around gender pay gap reporting our consultants are here to help, contact:

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.