Gender Pay Gap: what do we know so far?

GPG 4 April 2018

At midnight on 4 April 2018 the UK reached a milestone. The deadline for employers with over 250 employees to report their gender pay gap came and went quietly into the night – but the implications of the data will doubtless be impactful.

Alongside the hourly wage figure, companies were required to disclose their bonus pay gap and reveal the proportion of men and women in each quartile of their business. Companies also had to give both their mean and median gender pay gap.

A last-minute flurry of reporting saw more than 1,100 companies report their figures in the 24 hours before the deadline – more than the total number of companies that had reported in the first 326 days of the scheme. Reporting has also been dogged by questions raised about the quality of some of the filed data, a number of companies having entered zero in all fields, reported mathematically impossible bonus gaps or removed key workers.

Home Secretary, Amber Rudd, also the minister for women and equalities, said, “Businesses should see reporting gender pay gap data as just the first step on the road to creating fairer and more equal workplaces across the UK. They should be putting action plans in place to break down the barriers to women’s progression in their organisations.”

And regardless of gaps and teething troubles the figures already in paint an illuminating picture.

The data so far reveals men are paid more than women in 7,795 out of 10,016 companies and public bodies in Britain, based on the median hourly pay. And it shows that eight out of 10 companies have a gender pay gap.

If you line up all the men and women working at a company in two separate lines in order of salary, the median pay gap will be the difference in salary between the woman in the middle of her line and the man in the middle of his. It's calculated on an hourly basis and includes both full-time and part-time workers. It's the key measurement used by the Office for National Statistics (ONS).

The figures do not reflect equal pay for equal work – something gender pay gap expert Helene Reardon-Bond – who also played a key role in shaping the requirement to report the figures - noted was a major confusion for many in her recent everywoman podcast. However, they do raise questions about structural inequalities in the workforce and will hopefully lead to effective answers as to how we close the gap.

Analysts, newspapers and academics have rushed to study the data, and so far it is clear that the UK has a national pay gap of 18.4%. This puts it below the Organisation for Economic Co-Operation and Development (OECD) average: South Korea having the biggest gap among OECD countries, and Belgium the smallest.

The data has also highlighted that the gender pay gap varies between industries, although analysis has had different interpretations. For example, The Guardian reported the construction sector as having the highest average median gender pay gap at 25%, followed by finance and insurance at 22% - while the BBC named finance as having the highest pay gap.

Perhaps surprisingly the median GPG has been found to be 20% in education – but only one per cent in the accommodation and food services sector. What is irrefutably clear though - is that no sector pays women better than men on average and that women are underrepresented in top-paid jobs, when compared to the business as a whole, in 82% of companies.

The limitations of the figures have had their critics: the key measure of the median hourly pay gap across an entire business does not address the gap in similar job roles and, due to exemptions, high-level executives, including partners and non-employed, typically low-paid workers are not included. 

But the scale of the UK’s data-gathering exercise on the gender pay gap is pioneering – and a crucial landmark that will force employers to look at the barriers facing women’s progression in the workplace.

“The gender pay gap deniers will say that the gap only exists because of the choices women make, but while everyone makes choices women make constrained choices,” said Helene Reardon-Bond. “This is absolutely monumental: we have got people from all different industries and walks of life sitting down and talking about this. Most businesses have never worked out their gender pay gap. Well, now they have, the question remains what they will do about it.”