Official figures released today reveal that the gender pay gap in the United Kingdom has been gradually narrowing, albeit at a modest pace.
However, a notable and encouraging trend has emerged: an increase in the proportion of women occupying higher-paid positions.
These findings stem from an analysis conducted by BDO, which examined data from approximately 5,300 companies, charities, and public sector organisations reporting their gender pay gaps over the past six years since mandatory reporting was introduced.
Over the six-year period from 2017/18 to 2022/23, the mean hourly pay gap between men and women decreased from 15.07 percent to 12.97 percent, reflecting only a modest reduction.
Despite this, a significant shift has occurred in the composition of higher-paying roles, signifying progress in gender diversity at senior levels.
The mean average gender pay gap
BDO’s analysis indicates that 65 percent of organisations in the UK have made strides in narrowing the mean average gender pay gap during the same timeframe. However, for 34 percent of organisations, the gender pay gap has increased.
Companies that reported closing gender pay gaps saw the average mean gender pay gap decrease from 19.1 percent in 2017/18 to 12.5 percent in 2022/23. Conversely, companies reporting a widening pay gap experienced an increase from 11.5 percent to 17.6 percent over 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 a longer 63 years to close the median pay gap.
An increase of women in higher-paying jobs
While the overall picture of progress in closing gender pay gaps is mixed, one bright spot is the notable increase in the representation of women in higher-paying positions. The data shows a 4.9 percent increase in the number of women in the upper quarter of the hourly pay scale, reaching 40.69 percent, and a 2.0 percent increase in the upper middle quarter, reaching 45.6 percent.
This trend of growing female representation in higher-paying roles is considered a critical shift that is likely to have the most significant impact on closing the gender pay gap.
BDO’s analysis identified the financial services, construction, and technology sectors as having the most substantial hourly gender pay gaps. While efforts have been made in recent years to bolster female representation in these traditionally male-dominated fields, such as initiatives to increase women’s participation in graduate schemes, these changes may take time to be reflected in gender pay gap figures. In some instances, they could even temporarily contribute to the widening of reported pay gaps as more women enter entry-level or lower-paid roles within these industries.
David Ellis, Head of Strategic Reward Advisory at BDO, commented on the findings, saying:
“While there has always been a lively debate over the usefulness of gender pay gap reporting statistics in terms of measuring progress, they do serve an important purpose in keeping attention focused on this very important issue. Progress in reducing gender pay gaps may seem somewhat glacial, but we are nevertheless now beginning to see some important emerging trends, notably the increase in female representation at the higher pay scale levels. This is undoubtedly an encouraging development and arguably more positive than the modest changes we’ve seen in the headline gender pay gap figures themselves.”
As the UK continues its efforts to address gender pay disparities, these findings highlight the importance of ongoing initiatives to promote gender equality in the workplace and the need for continued scrutiny and action to accelerate progress.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.