Number of employers explaining their gender pay gap drops significantly

The gender pay gap has lowered year on year, but is the same as when the audits first came in, possibly because employers are giving it less priority, according to a new report which finds a significant drop in the number of employers publishing explanations of their gap.

The Chartered Institute for Personnel and Development’s analysis shows the median gap for 2022/23 – the difference between the midpoints in the ranges of hourly earnings of men and women – stands at 9.4%, meaning that for every pound a man earned, a woman earned approximately 91 pence. This is down on the 9.7% recorded for last year, but is the same as the gender pay gap reported back in 2017/18, when UK employers with over 250 employees were first required to disclose their gender pay gap data.

In addition, the mean gap – which is calculated by adding all employees’ rates of pay together and dividing by the total number of employees – is also down, from 13.4% in 2017/18, to 12.8% for 2021/22, and to 12.3% for 2022/23.

However, the CIPD says both the median and mean figures disguise some wide variations. Geographically, for instance, employers based in London (11.6%),the southwest (11%) and the southeast (10.3%) of England have a much higher gap than those in Wales (5.6%) and Scotland (5.9%).

Also the largest employers tend to have lower pay gaps than medium-sized employers. For example, the median gender pay gap among those workplaces with between 250 and 499 workers is 10.1%, while among those employing between 5,000 to 19,999, it’s 8.7%.

By sector, the widest gender pay gaps continue to be found in the financial and insurance sector (22.1%), construction (22.1%) and education (20.4%). By contrast, the gender pay gap is narrowest in the accommodation and food service activities (1.1%) and human health and social work activities (1.9%) sectors.

It says one possible reason may be that employers might be giving less priority to creating a gender balanced workplace. Organisations have been encouraged over the years to provide information that explains their gender gap as well as an action plan on how to address it.

In the first year of reporting, 74% of employers who submitted their gender pay gap data also gave a weblink to a narrative explaining their figures and any plans they might have to create a more equal workplace. By 2022/23, however, this proportion had slumped to 56%. The CIPD says this possible shows that “some employers no longer feel the need to justify their figures or actions”.

The CIPD says this is shortsighted as more jobseekers, investors and customers are asking questions about how employers reward all their workers. It adds that having a narrative to explain reward “will not only help employers in dealing with their external stakeholders, it could also help internally”. 

It states: “While not a silver bullet, the CIPD believes that at a time when the labour market is tight and economic growth low, having a fairness strategy could help create a competitive advantage for those employers that adopt one. In addition, it could also help create a more equal society. Also, if the number of employers publishing an explanation of their gender pay gap figures continues to drop, then we might see UK Government intervention and a requirement to publish a narrative.”

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