Wed 27 Oct 2021

Early analysis suggests gender pay gap has widened

Gender pay gap now stands at 13%

It is likely we will see a number of different gender pay gap figures this year as statisticians grapple with how to deal with the impact of furlough. The deadline for reporting this year was effectively 5 October 2021 (due to enforcement action being delayed until then) with employers having to use pay data from the snapshot date of 5 April 2020 to calculate their pay gap. However, when calculating the gap, employers had to exclude the pay for any staff who were furloughed on the snapshot date.  Analysis done by the Financial Times (FT), showed a pay gap of 13% across the board, although this excludes any sector with fewer than 50 employers or where more than 30% of staff were furloughed on the snapshot date. 

The increase from the previous year was small - last year the pay gap was found to be 12.8% - but mandatory reporting had been suspended and only around 65% of employers chose to report in 2020. It is very difficult to calculate an accurate trend in the pay gap given the impact of furlough, which will also affect next year's figures which will relate to the snapshot date of 5 April 2021. Based on the FT analysis however, the overall trend, does seem to be in the wrong direction - the pay gap from 2019 (snapshot date of 5 April 2018) having been 11.9%. 

This year's figures showed men are, on average, paid more in all sectors. The average pay gap rose in sectors including finance and insurance, education, technology, energy and information and communication. Improvements were made in sectors including manufacturing, transportation and storage, human health and social work and arts, entertainment and recreation. Banks and law firms were amongst those reporting the largest gaps. 

The UK Gender Pay Gap regulations have been repeatedly criticised as being toothless. Analysis by the Global Institute for Women's Leadership at King's College London and the Fawcett Society published the day before this year's reporting deadline ranked the UK's reporting system as joint last when compared to similar systems across a number of countries. The primary criticism of the UK system is the lack of a requirement for employers to produce any form of action plan for reducing the gap, rendering it simply a data collection exercise.

The gender pay gap gives a picture of the progression of women (or lack thereof) into more senior and higher paid roles. It is not an indicator that men and women are getting paid different amounts for doing the same role (which would be an equal pay issue).  By its nature it will take time to improve but the fact the gap appears to be continuing to widen is a significant cause for concern. 



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