‘Slight fall in gender pay gap, but Covid could mask reality’

Gender pay gaps are continuing to narrow slowly, according to a PwC analysis of this year’s figures, but it warns that the pandemic may be masking what is happening on the ground.

The analysis shows that among companies that disclosed their pay gaps there has been a decline from an average of 14.2% in 2017/18 to 13.1% in 2020/21.

Just over half (56%) of the 8,633 companies to report their gender pay gaps reported a reduction in their mean pay gap, while 53% reported a decrease in their mean bonus gap. However, the average gap recorded for 2020/21 represents only a 0.2% decrease on the prior year (13.3%). Overall, 41% of companies reported an increase in their gender pay gap, while 3% remained static.

Companies with more than 250 employees must report their gender pay gap. PwC analysis shows that 75% of companies utilised the six-month extension to pay gap reporting, with 45% choosing to report in the last month before the extended 5th October 2021 deadline. Six out of 10 of the companies to report prior to the initial 5th April cut-off have 20,000 or more employees, suggesting a continued focus on gender balance, inclusion and diversity from larger companies who are less likely to have experienced resourcing challenges over the past year.

Earlier analysis of gender pay gap reporting up until the initial April deadline showed the average mean gender pay gap had dropped to 12.5%. The increase to 13.1% following the most recent reports – which includes a large proportion of smaller-sized businesses – further highlights how these companies face greater challenges in closing their gender pay gaps, says PwC, including a reduced capacity to focus on diversity and inclusion (D&I) initiatives when compared with larger businesses with greater D&I budgets.

Anna Sanford, employment legal director at PwC, said: “While it’s positive that some progress is being made towards gender pay parity, an apparent slight decrease in the gender pay gap this year may be masking other workforce patterns that are detrimental to gender diversity and inclusion in the workplace. We know women are more at risk than men of losing their jobs or experiencing reduced hours or pay as a result of the Covid-19 crisis. This year’s gender pay gap results should be viewed in light of the continued impact of the pandemic and businesses will need to watch carefully what patterns emerge for 2022 as they reassess their workforce amidst new market patterns and challenges.

“The average gender pay gap in 2020/21 is 13.1% –  a one percentage point decrease from the average gap reported three years ago, when reporting became mandatory. The gender bonus pay gap also remains stubbornly high at 34.8%. Companies will need to assess the data they have to find out what is causing this gap to persist and what could be preventing it from closing.”

In other diversity news, the latest national Employer Index by the Social Mobility Foundation shows law firms and consultancies are leading the way in driving social mobility in the workplace. Browne Jacobson scored first place in the ranking of the top 75 organisations, followed by KPMG and Herbert Smith Freehills. HMRC was the only public sector organisation to make the top ten in the Foundation’s report.

Meanwhile, a study by jobs site Adzuna found the number of job adverts explicitly requiring candidates to be vaccinated rose by 189% between August and October as more firms ask for workers to be vaccinated before they start their job. The sectors with the highest proportion of job adverts mandating vaccination are social care, at 2% of all positions, followed by healthcare and nursing at 0.9%, and charity jobs at 0.6%. Andrew Hunter, co-founder of Adzuna, said the figures could illustrate the start of a wider trend in Britain. “A taboo appears to be breaking where large corporations are putting a stake in the ground and saying, ‘Right, you have to be vaccinated by a certain date,’” he said.

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