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Gender pay gap stagnation signals lack of attention

PwC analysis of gender pay gap data released today has found that 43% of the 10,282 companies that disclosed their data this year reported an increase in their average pay gap, compared to 41% of the 8,456 companies that reported an increase last year (2020/21).

Over half (53%) reported a decrease and 4% reported no change.

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While the average pay gap is not a statistically significant increase Helen Giles, director of people and culture at Revitalise, said it is disappointing that more companies have not managed to decrease their pay gap compared to the prior year.

Speaking to HR magazine, Giles said: “A gender pay gap is almost always explained by women not being promoted or appointed to senior roles in proportion to the number of men holding these positions.”

Since reporting began in 2017, the mean gender pay gap has declined by just 0.5%.

The national average gender pay gap is now 12.9% (down 0.3% from last year), and median pay gaps have increases from 9.2% 2017/18 to 9.8% in 2021/22.

HRMI 2021 practitioner Neil Morrison warned HR directors against reading too much into the figures.

Speaking to HR magazine, he said: "Year on year changes are interesting but we do see ratios jump around a bit so we need to be careful not to draw too much inference from it and longer term trends are probably more meaningful in providing real insight.

“The key thing is to understand what's driving any change in your data and whether that's an in year issue, or something longer term that needs more fundamental intervention.”

For HR directors looking to decrease their pay gap, Giles advised examining the gendered impact hybrid working could be having on their workforce.

She said: “Although in theory hybrid working or total home-based working is good for saving on commuting time and money, it is very difficult for people who want to progress to be able to learn and grow when they are not in a space where they can easily learn from managers and peers by observing and interacting, and where they can gain confidence from getting immediate feedback from these interactions.

"HRDs need to make sure the equality impact of new working patterns is assessed on an ongoing basis and measures put in place to address any emerging negative impacts."

The pressure to fill open job vacancies may mean that discriminatory practices are leaking back into recruitment too, Giles added:

"Again, as HRDs, we need to keep an eye out for whether this starts to lead to any reversal in terms of diversity of representation at different levels in our organisations and think about what we can do to mitigate against that.”

Similarly, Katy Bennett, diversity and inclusion consulting director at PwC UK, warned employers to mind pitfalls in the race for talent.

She told HR magazine: "If the right checks and balances are not in place to ensure decisions are fair and the impact on women compared to men is understood, there is a risk that decisions on pay and recruitment could take the gender pay gaps backward."

To make real, noticeable change in the gender pay gap Bennett urged businesses to get leadership on board.

She added: "A first step should be getting leadership informed of the urgency of this issue and ready to take action. This awareness is more important now than ever.”