The UK gender pay gap will not close until 2065, 40 years from now, in spite of reporting requirements introduced in 2017.
Data analysis has revealed that 23 percent of employers have made no progress at all in closing their gender pay gap since the introduction of reporting.
Analysis showed that in the reporting year (2023/24) women were paid an average of 12.5 percent less an hour than men. Research analysts said this is the lowest the pay gap has been since mandatory reporting was introduced for organisations with more than 250 employees in 2017. However, the proportion of men and women in the highest pay quartile remains male dominated with men accounting for 59 percent and women accounting for just 41 percent.
These were the key findings from an analysis of publicly available data from more than 10,000 employers by Isio, a pensions, investment, reward and benefit, and wealth advisory business.
The data suggests that more focused and urgent action is needed from employers and policymakers to accelerate change, Isio researchers said. Results show that as 23 percent of organisations either experienced no change or saw their hourly pay gap widen, progress in gender pay parity is uneven.
Employers in the financial and insurance sectors reported an average gap of 23 percent as 85 percent of employers in these sectors have a gap greater than 10 percent.
By contrast, in the public administration and defence sectors, less than a quarter of employers have a pay gap wider than 10 percent.
High pay gaps were also revealed in the construction, information and communication, mining, and science sectors, where the data showed that the hourly pay gap is greater than 10 percent for more than seven in ten companies.
With UK government plans to extend pay gap reporting and redouble efforts to close the gender pay gap employers will be expected to make more progress.
There are expectations that the government will also bring in pay reporting for ethnicity and disability. Isio said employers need to ensure that they are collecting and reporting accurate data, while also engaging employees in the process.
From its analysis the advisory firm identified common errors that employers make when preparing their gender pay gap reports. These include not excluding employees who have left before the reporting date, incorrectly reporting earnings for part-time workers and mistakes when reporting bonuses, for example around bonus sacrifice arrangements.
Mark Jones, reward and benefits partner at Isio, said: “It is encouraging that the gender pay gap continues to fall, but we still have a long way to go. Lots of sectors still have sizeable gaps and this is usually where women are underrepresented in senior roles. While many businesses have introduced policies to accelerate change, this will take time to feed through in the data and reduce their gender pay gaps.
“The introduction of mandatory reporting has been a positive step and sets a good example for employers determined to take further action. Proactive employers are embedding diversity and inclusion into their core business strategies and taking concrete steps to close the gap by improving transparency, and developing action plans that go beyond the current reporting requirements.”
“Closing the gender pay gap requires leadership, commitment, and action. Employers who take the necessary steps to address this will not only improve their pay equity but will also gain a competitive edge in attracting and retaining top talent.”
