Ryan FowlerThe overall UK gender pay gap has fallen by 0.4% over the past year, according to PwC research. Among UK companies that disclose their mean hourly gender pay gap, there has been a decrease from 12.2% in 2022/23 to 11.8% in 2023/24. The median hourly pay gap has also decreased slightly from 9.2% in 2022/23 to 9.1% in 2023/24.
While the UK gender pay gap continues to reduce each year, the rate of change remains modest. Since the introduction of mandatory gender pay gap reporting in 2017 for companies with over 250 employees, the mean gender pay gap has only fallen by 1.6% from 13.4% in 2017. Gender pay parity remains out of sight for a 21-year-old woman entering the workforce today, with the analysis suggesting it will take over 45 years to close the gender pay gap in the UK.
PwC analysis shows that of the companies that disclosed their pay gaps for both 2023/24 and 2022/23, almost 60% reported a decrease compared with the previous year. However, the majority of these reductions were less than 2%. This is a slight increase compared to 2022/23, where 53.7% of organisations reported decreases in their mean pay gap.
Overall, 20.1% of organisations reported no change or an increase of between 0% and 2% in their pay gap, compared with 17.6% in 2022/23. The pace of change indicates that companies are still struggling to close the pay gap, which can often be a lagging indicator, with positive actions to improve gender representation taking years to significantly impact these figures.
Katy Bennett, diversity, inclusion and equity consulting director at PwC, commented: “Whilst the gender pay gap continues to move in the right direction, the data once again highlights that organisations are facing difficulties in meaningfully reducing reporting figures. Societal barriers play a strong part but there are still things businesses can do to drive change and so it is critical for organisations to truly understand gender pay gap drivers and take targeted actions to address them.
“The global Environmental, Social and Governance (ESG) reporting landscape is evolving rapidly and many organisations are increasing their focus on pay fairness and transparency, as well as pay gap and diversity reporting, including beyond gender. It is now more important than ever for organisations to take a step back to fully understand the state of pay fairness and diversity within their workforce. By truly understanding any barriers that exist within the workforce and embracing pay transparency, organisations can navigate the reporting landscape and use it as a way to shape their narrative, as opposed to letting it dictate it.”
Sector overview
The financial services sector continues to report the biggest gender pay gaps, reflective of ongoing issues with gender equality within the sector, where potential regulations on diversity and inclusion may be introduced by the Financial Conduct Authority later this year. While the financial services sector has consistently reported the highest pay gaps, it has also reported the biggest decreases in pay gaps compared to the previous year, alongside the travel and technology sectors. Public administration, health, hospitality, and leisure continue to be the sectors with the lowest mean hourly pay gaps.
Organisation size
Large organisations with more than 20,000 employees generally had the lowest mean hourly pay gaps each year. Smaller organisations display higher levels of volatility in the mean pay gaps, where a single employee can have a more significant impact on overall average pay due to the smaller overall employee population. In 2023/24, the mean pay gap has decreased for organisations of all sizes, excluding the largest, which have marginally increased by 0.1%.
