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An analysis of gender pay audits shows the pay gap narrowing, but many companies still have to report.
A new analysis of gender pay audits received so far this year shows gaps are narrowing, but many companies, particularly smaller ones, still have to report, says accounting firm PwC.
Its analysis shows a three-year decline among companies that disclosed their pay gaps, from an average gap of 14.3% in 2017/18 to 12.5% in 2020/21.
However, PwC notes that more than three quarters of companies with over 250 employees have delayed reporting in line with the extension granted by the Government Equalities Office due to the impact of the pandemic. Fifty eight per cent of those that did report before the original 5th April deadline recorded a drop in their mean pay gap.
PwC says that larger companies are much more likely to have already reported for the year, with more than 60% of those with 20,000 or more employees having done so before 5th April. However, it also observes that larger companies are less likely to have experienced resourcing challenges over the past year.
Moreover, businesses from the banking, investment and utilities sectors are most likely to have disclosed early while those in the hospitality industry, which has been hard hit by Covid, reported at lower rates. Analysis shows there has been a decrease since 2017/18 for 18 of 24 sectors considered in each of the past three years.
Katy Bennett, Inclusion and Diversity Director at PwC, said: “We know from our own research that women are more likely than men to have lost their jobs or experienced reduced hours or pay as a result of the pandemic and also to be more fearful for their future job security. During the next 12 months, the external pressure on companies in respect of inclusion and diversity will only build. We expect to see greater focus in particular in relation to the impact on pay gaps of diversity initiatives discussed over recent years and how inclusion and diversity link to ESG goals and ambitions.”
She highlighted the importance of companies continuing to report given the disproportionate impact on women of the pandemic and added: “In reality, with so many companies still to disclose their gender pay gap, it will only be after October that we get a true picture of this year’s reporting. This data will also likely give us a much richer picture of the impact that the pandemic has had on women compared to men. This is because the statistics reported will be in respect of those who were in employment, and not on furlough, in April 2020. Therefore we may see noticeable differences in the pay gap levels in companies and industries where significant numbers of individuals were furloughed or no longer in employment by April 2020.”
Meanwhile, figures from Manpower Group show that pay across key UK sectors, including construction, hospitality, engineering and pharmaceuticals, is up by an average of 13% so far this year compared with a year ago. The company said competition for top talent is so intense that two in every five job offers are being met by a successful counter-offer by the candidate’s current employer.