In the six years since the introduction of mandatory gender pay gap reporting in the UK, the mean hourly pay gap between men and women has reduced only modestly from 15.07% to 12.97%. However the same period has seen a discernible rise in the proportion of women in higher paid roles, according to an analysis of official data by business advisory firm, BDO.
The findings are based on figures from around 5,300 companies, charities and public sector bodies which have reported their gender pay gaps in each of the last six years, which covers the whole period since the mandatory reporting requirement came into force.
Although almost two-thirds (65%) of UK organisations have managed to make progress in narrowing the mean average gender pay gap between 2017/18 and 2022/23, that leaves another third (34%) of organisations where the gap has increased.
While the average mean gender pay gap for companies reporting a closing gap moved from 19.1% in 2017/18 to 12.5% in 2022/23, the average for companies reporting a widening pay gap moved from 11.5% to 17.6% during the same period.
At the current rate of progress, BDO estimates that it will take 37 years to close the mean hourly gender pay gap and 63 years to close the median pay gap.
While the figures paint a mixed picture in terms of the progress being made in closing gender pay gaps, there has been a discernible and positive increase in the representation of women in higher pay grades over the six-year period to 2022/23.
The data shows a 4.9% increase in the numbers of women in the upper quarter of the hourly pay scale (to 40.69%) and a 2.0% increase in the upper middle quarter (to 45.68%). This trend which shows a growing proportion of women in higher-paying positions is a critical shift and one that is likely to have the most significant impact when it comes to closing the gender pay gap.
“While progress in reducing gender pay gaps may seem somewhat glacial, we are nevertheless now beginning to see some important emerging trends, notably the increase in female representation at the higher pay scale levels,” said David Ellis, Head of Strategic Reward Advisory at BDO.
“This is undoubtedly an encouraging development and arguably more positive that the modest changes we’ve seen in the headline gender pay gap figures themselves.”
BDO found that the financial services, construction and technology sectors exhibited the most substantial hourly gender pay gaps. While there have recently been greater efforts made to increase female representation in these traditionally male-dominated fields, it can take time for these efforts to be reflected in gender pay gap figures. Indeed, in some circumstances, they could even contribute to the widening of reported pay gaps in the short term as more women join entry or lower-paid roles within these industries.