Gender pay gap falls, but not by much

The gender pay gap has closed by 0.4%, according to a PwC analysis of the annual gender pay gap audit.

Wage Inequality diagram, showing gender pay gap

 

The overall UK gender pay gap has fallen 0.4% for companies with over 250 employees in the past year, according to PwC analysis.

It says the gap [which measures the gap between all women and men’s earnings in an organisation and not the gap between men and women doing the same job] has fallen from 12.2% in 2022/23 to 11.8% in 2023/24. The analysis also shows the median hourly pay gap has decreased marginally from 9.2% in 2022/23 to 9.1% in 2023/24.

Since the introduction of mandatory UK gender pay gap reporting in 2017 for companies with over 250 employees, the mean gender pay gap has only fallen by 1.6% from 13.4% in 2017.  PwC says the analysis suggests it will take over 45 years to close the gender pay gap in the UK.

Its analysis shows that of the companies that have disclosed their pay gaps for both 2023/24 and 2022/23, almost 60% reported that their pay gap had decreased compared with the previous year.  However, the majority of these reductions were less than 2%. This is a slight increase in comparison to 2022/23, where 53.7% of organisations reported decreases to their mean pay gap.

Overall, 20.1% of organisations reported no change or an increase between 0% and 2% to their pay gap, compared with 17.6% in 2022/23.

The Financial Services sector continues to report the biggest gender pay gaps, but has also reported the biggest decreases in pay gaps compared to the previous year, alongside the Travel and Technology sectors. As with 2022/23, Public Administration, Health, Hospitality and Leisure continue to be the sectors with the lowest mean hourly pay gaps.

Large organisations with more than 20,000 employees generally had the lowest mean hourly pay gaps each year. Smaller organisations display higher levels of volatility in the mean pay gaps, where a single employee can have a more significant impact on overall average pay due to the smaller overall employee population. In 2023/24, the mean pay gap decreased for organisations of all sizes, excluding the largest, which have marginally increased by 0.1%.

Katy Bennett, diversity, inclusion and equity consulting director at PwC, said: “Whilst the gender pay gap continues to move in the right direction, the data once again highlights that organisations are facing difficulties in meaningfully reducing reporting figures. Societal barriers play a strong part but there are still things businesses can do to drive change and so it is critical for organisations to truly understand gender pay gap drivers and take targeted actions to address them.

“The global Environmental, Social and Governance (ESG) reporting landscape is evolving rapidly and many organisations are increasing their focus on pay fairness and transparency, as well as pay gap and diversity reporting, including beyond gender. It is now more important than ever for organisations to take a step back to fully understand the state of pay fairness and diversity within their workforce. By truly understanding any barriers that exist within the workforce and embracing pay transparency, organisations can navigate the reporting landscape and use it as a way to shape their narrative, as opposed to letting it dictate it.”

 



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