Latest research suggests the Gender Pay Gap is wider than thought

Recent research carried out and published in the British Journal of Industrial Relations suggests that the Gender Pay Gap may be wider than previously reported. Specifically, the research suggests that the figures released by the Office for National Statistics have consistently been, in effect, under-represented by approximately 1%. The official figure for the gap was 7% in 2024 (based on full-time work), but the research suggests that figure is more likely to be 8%.

In short, this discrepancy is due to the original “weighting” under-representing smaller private sector firms, as they were considered less likely to respond or provide statistics (given that only businesses with more than 250 employees are required to report on their Gender Pay Gap). Generally speaking, these smaller private sector firms may see a bigger discrepancy between pay for men and women than larger employers where the salaries are typically higher and thus the gap may be smaller.

Whilst it is “only” 1% in terms of a discrepancy, this is a clear concern where there is already a significant gap, which employers are being asked to close.

New report on improving gender equality in the workplace

Separately, the government’s Women and Equalities Unit have published a new report from the “Behaviour Insights Team” assessing the Gender Pay Gap and how to improve gender equality at work. The report includes evidence-based actions to assist employers in respect of these goals.

It will be of no surprise that the evidence suggests that diverse views and perspectives improve decision-making and creativity within the workplace. The report therefore identifies 4 areas for employers to focus on in order to improve gender equality at work, as follows (with a brief summary of each area below):

1. Hiring and selection – the guidance identifies that 9 in 10 people in the current job market want some form of flexibility at work, and therefore the small act of advertising specific flexible working arrangements can result in as much as a 50% increase in the application pool (based on information provided by John Lewis). Employers are encouraged to consider all options, including part-time roles and job-sharing where possible and appropriate.
2. Talent management, learning and development – increasing transparency regarding promotion, pay and reward processes is encouraged as it allows employees to understand what is required of them and it encourages managers to assess performance objectively.
3. Inclusion and retention – again, the recommendations relate to flexibility within the workplace, including specifically encouraging employees who are parents to take parental leave and allowing flexible working to help with childcare responsibilities.
4. Leadership and accountability – employers are encouraged to set internal targets for gender representation and equality, including appointing diversity leads/ taskforces. Setting clear and specific goals is identified as a key factor in accountability within an organisation.

Practical Takeaways

There is no doubt that the Gender Pay Gap continues to be an issue within the workplace. The latest guidance, while not binding on employers, is intended to assist employers in reducing the gap and improving gender equality within the workplace. For many employers, this won’t necessarily be a quick fix, but the guidance will provide practical tips and advice for improving related issues.