The Midlands falls in ranking on PwC’s Women in Work Index

• East Midlands and West Midlands fall to 11th and 12th respectively in latest Women in Work Index rankings

• East Midlands sees the largest annual drop in the Index, by six places, while the West Midlands falls two places

• Both regions have a gender pay gap higher than the national UK average, however the West Midlands gap has narrowed slightly from 15.5% in 2021 to 15.0% in 2022.

• The UK slips from 13th to 17th in the Index ranking - the steepest annual decline amongst OECD countries - with Luxembourg, Iceland and Slovenia the best performing

• Scotland is the UK’s top performing region, jumping from third to first place

The East Midlands and West Midlands regions have fallen to 11th and 12th place respectively in the Women in Work Index, a report by PwC that assesses progress made towards achieving gender equality. The OECD Index assesses the performance of 33 OECD countries including the UK as a whole, while the UK regional Index assesses the performance of the UK’s nations and regions.

The report shows that the gender pay gaps in both regions are larger than the UK’s overall average pay gap of 14.5% as well as the OECD average of 13.5%. In addition, the Midlands has seen a slight decline in the female participation rate, which is the number of women of working age (15 to 64) who either have a job or are seeking work. 

Alex Hudson, Market Senior Partner for PwC East Midlands, said:

“The latest Women in Work Index highlights the work that needs to be done in the Midlands to achieve better outcomes and opportunities for women. A number of factors are driving the Midlands performance in the Index, including the region traditionally being home to manufacturing and industrial industries, which are typically heavily male dominated sectors, as well as issues we’re seeing across the UK with women leaving the workplace. That said, we’re also seeing regions perform well and move up the rankings, demonstrating that changes can be made with the right focus.

“One of the ways we can improve our ranking is by encouraging more women into typically male dominated careers, such as manufacturing and STEM fields. Working with initiatives such as TechSheCan in the region, which was developed to encourage and empower more women into technology careers, will help create space for more women in these workplaces. Equally at PwC we’re committed to a five point diversity action plan to encourage inclusion across all areas of our business. This includes specific programmes and initiatives for women to ensure we have a strong pipeline of female talent.”

The UK ‘gender pay penalty’

The report finds that, even after accounting for a range of pay-determining factors, the pay disparity between women and men in the UK still persists with women earning almost a tenth less than men on average. 

This ‘gender pay penalty’ worsens with age, with women between the ages of 46 and 65 experiencing more than twice the gender pay penalty than that of women between 16 and 30 years. Indeed, while a woman entering the workforce faces a pay penalty of around 5.2% on average, this widens to nearly 13% as her career unfolds. The report highlights the ‘motherhood penalty’, with women taking on an unequal share of childcare responsibilities, as a key driver. This is compounded by men often having more time available to perform so-called ‘greedy jobs’, which demand unpredictable and longer hours and tend to be more highly paid. In addition, women between 46 and 65 are also likely to be impacted by health conditions and the menopause, which may require them to take more time off work, potentially affecting their career progression and compensation. 

Strikingly, married women and those in higher income brackets also face a hit to their earnings when compared with men with similar personal and professional backgrounds - for example, people living in the same area and working in the same industry.

Ian Elliott, Chief People Officer at PwC UK, said:

“Our analysis is a timely reminder that employers have to look at all the factors that contribute to pay gaps. Alongside transparent and robust gender pay gap reporting, it’s also vital that health and wellbeing resources are accessible and the workplace is an empowering place for employees experiencing the menopause and other health conditions. Moreover, it’s crucial that working parents are properly supported - championing flexible and hybrid working, alongside progressive parental leave policies, is key.”

Addressing the gender pay penalty could unlock significant economic gains for the UK economy. If women no longer faced a gender pay penalty, the total increase in women’s earnings in the UK could be up to £55bn every year. Moreover, it could also encourage more women to join or rejoin the workforce - a 5% increase in the total number of women in employment could boost UK GDP by up to £125bn every year.