Two in five companies reported wider gender pay gaps last year, report finds

Experts warn ‘large and persistent’ pay gap could get in the way of recruiting and retaining talent amid turbulent jobs market

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More than two in five firms have seen their gender pay gaps widen over the last year, analysis of reported data has found.

A report from PwC, which looked at data disclosed by 10,282 companies, found 43 per cent had reported a larger pay gap compared to the previous year.

Half (53 per cent) of businesses reported a narrowing of their gender pay gaps over the last year, while 4 per cent reported no change.

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For the year 2021-22, the pay gap stood at 12.9 per cent, a decline of 0.3 percentage points on 2020-21. This means women earn on average 87p for every £1 earned by men.

The average gender pay gap decreased by 0.5 percentage points since mandatory reporting was first introduced in 2017 and the report estimated that, at the current rate, the gap would not be closed until the year 2151.

Katy Bennett, diversity and inclusion consulting director at PwC, said businesses were facing a number of challenges, but that gender pay reporting gave firms an “opportunity to stand out from the crowd”.

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“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,” she said.

Bennett added that “five more generations of women is too long to wait” for the pay gap to close.

Emily Liddell, campaigns manager at the Fawcett Society, said employers needed to take “urgent” action on gender pay, including ending the practice of asking about salary history during recruitment processes, offering flexible working by default and establisthing clear and transparent rules around career progression.

“Without action, there is a real risk that pay gaps will continue to increase in some of our largest sectors,” she said. “This is not only bad news for women, but bad news for employers who want to create productive, thriving and equal workplaces.”

The PwC report found the sectors with the biggest increases in gender pay gaps were agriculture, which saw its pay gap increase 4.6 percentage points to 13.2 per cent, and travel, which saw its gap widen 3.9 percentage points to 17.6 per cent.

Mining, energy and real estate were the sectors that saw the largest decreases in gender pay gap, falling 5.4 percentage points, 3.4 percentage points and 3.1 percentage points respectively.