The overall average gender pay gap is continuing to narrow but very slowly, according to PwC analysis. Among companies that disclose their pay gaps each year, there has been a small decline of 0.3% from an average pay gap of 13.2% in 2020/21 to 12.9% in 2021/22. That means, on average women in the UK earn 87p for every £1 men earn.
- The national average (mean) gender pay gap is now 12.9% (down 0.3% from last year), the national average (mean) gender bonus gap is 32.5%
- Since reporting began, five years ago in 2017, the mean gender pay gap has declined by only 0.5%. The median pay gaps indicates slightly more volatility with an increase from 9.2% 2017/18 to 9.8% in 2021/22
- 1,826 more companies reported their gender pay gap details this year (2021/2022), taking the total to 10,282
- Almost half (43%) of the companies disclosing their data this year reported an increase in their average pay gap. Compared to 41% of 8,456 companies reporting an increase last year (2020/21). This year, 53% of companies reported a decrease in their gender pay gap, 4% reported no change
- 52% of companies have reported a reduction in their average bonus gap compared to 53% reporting a decrease last year. 44% of companies reported an increase in their gender bonus gap, 4% reported no change
PwC’s analysis has shown that overall, average pay and bonus gaps have decreased since 2017. Between 2017/18, when reporting first became mandatory for UK companies with over 250 employees, and 2021/22, the average mean gender pay gap has fallen by 0.5%, from 13.4% to 12.9% this year. However the median pay gap has increased by 0.6% from 9.2% 2017/18 to 9.8% in 2021/22.The mean bonus gap has fallen by 3.3% from 35.8% in 2017/18 to 32.5% in 2021/22. Likewise, the median bonus gap has fallen 2.8% from 19.5% in 2017/18 to 16.7% in 2021/22.
Since last year, the majority of companies’ pay gaps have changed by only plus or minus 5%, showing that most organisations continue to struggle with making impactful changes to the gap, and that significant change may take a long time.
Katy Bennett, Diversity and Inclusion Consulting Director, at PwC UK, comments, “If the current rate of progress continues – so far achieving a 0.5% reduction over five years – the UK’s gender pay gap won’t disappear until 2151. A century – five more generations of women – is too long to wait. Businesses are facing a number of challenges but there is a massive opportunity to stand out from the crowd for those that take action, think bigger and experiment with new ideas.
“With one in five employees planning to quit their jobs in the next 12 months companies need to be doing everything they can to attract and keep talent. A large and persistent gender pay gap could get in the way of attracting and retaining talented people. The gender pay gap is an important metric when looking at issues facing women in work more broadly. You have to take a holistic approach to make a meaningful difference to pay gaps.”
A sector view
Over the last year,there has been an increase in the mean average gender pay gaps in 10 sectors, with the biggest increases in Agriculture (the sector’s average gender pay gap increased by 4.6% to 13.2%) and Travel sectors (increase of 3.9% to 17.6%). Financial Services, including Banking (28.9%) and Investment (25.7%), continue to have some of the highest average pay gaps, however there was a small (less than 2%*) reduction in the average gender pay gap in each sub sector in 2021/22.
The sectors that made the biggest reductions to their average gender pay gaps over the last year were Mining, Energy and Real Estate. The average gender pay gap in the Mining sector decreased by 5.4% to 17%, in the Energy sector it decreased by 3.4% to 17.5% and Real Estate by 3.1% to 25.1%. 64% of Energy and 70% of Real Estate companies reported a reduction in their average gap for 2021/22.
A recent report by PwC and POWERful Women showed that while there are some encouraging signs in the Energy sector of progress on gender diversity and inclusion, the industry still has a long way to go. The report found that within the Energy sector, women only occupy 15% of executive director positions – up just 1% from 2021- and only 20 out of 80 UK energy companies have any women in executive director roles.
Impact of the pandemic on women workers
The lack of fluctuation in the national average pay gap figures does not reveal the full impact of the pandemic on women in work. PwC’s Women in Work Index found that there are 5.1 million more women unemployed and 5.2 million fewer women participating in the labour market than would be the case had the pandemic not occurred. Katy comments: “Businesses, such as those in the Travel sector, who experienced the highest jump in pay gaps, will need to be looking at how the disruption of the pandemic, the mass exodus from workplaces, and subsequent restructuring has impacted the gender diversity and pay gaps in their businesses.” The Women in Work index found that closing the gender pay gap could boost women’s earnings across the 20 OECD countries by US$2 trillion per annum.
The environment affecting women in work and gender pay gaps is getting more complex. The restructuring of sectors and businesses post pandemic, inflationary pressures on the costs of living, including childcare, and the low growth predictions for the UK economy threaten progress.