Year 7 Gender Pay Gap Reporting 2023/2024
The gender pay gap has become a widely recognised measure of pay and gender representation within the UK since the introduction of mandatory reporting in 2017. As a result, many organisations use the metric as one way to monitor and report progress on gender diversity.
Despite some progress, our year-on-year data shows an overall slow pace of change, suggesting it will take over 45 years to close the gender pay gap in the UK. The gender pay gap itself can often be a lagging indicator, with positive actions to improve gender representation taking years to significantly impact these figures. Acknowledging the external societal influences and systemic barriers, change remains challenging. However, in order to make meaningful and sustainable reductions to pay gaps, it is critical for organisations to truly understand gender pay gap drivers and take targeted actions to address them.
Key trends
Our analysis shows a decrease of 0.4% in the mean pay gap from 12.2% in 2022/23 to 11.8% in 2023/24. The median hourly pay gap has decreased marginally from 9.2% in 2022/23 to 9.1% in 2023/24.
There have been larger decreases to both the mean and median bonus gaps over the reporting period, with the mean bonus gap moving by 2.1% from 31.7% in 2022/23 to 29.6% in 2023/24, and the median bonus gap decreasing by 1.3% from 15.6% in 2022/23 to 14.4% in 2023/24. Typically, bonus pay gaps can be more volatile than pay gaps, due to the performance related nature of most bonuses.
Year on year reporting figures
Size of change in mean pay gap from 2022/23 to 2023/24
When looking at the distribution of changes in the mean hourly pay gaps for companies that reported in both 2022/23 and 2023/24, 58.4% of organisations reported decreases to their mean pay gap. Of this, the majority reported small decreases between 0% and 2%. This is a slight increase in comparison to 2022/23, where 53.7% of organisations reported decreases to their mean pay gap.
Overall, 20.1% of organisations reported no change or an increase between 0% and 2% to their pay gap, compared with 17.6% in 2022/23.
Size of change in mean pay gaps by organisation size since 2017/18
The largest organisations (with 20,000 employees or more) have generally had the lowest mean hourly pay gaps each year, compared to other sized organisations. The smallest organisations display higher levels of volatility in the mean pay gaps, as a single employee can have a more significant impact on overall average pay due to the smaller overall employee population.
In 2023/24, we can see the mean pay gap has decreased for organisations of all sizes, excluding the largest, which have marginally increased by 0.1%.
Sector trends
Our analysis shows the Financial Services sector continues to report the biggest gender pay gaps. This is reflective of the ongoing issues with gender equality within the sector, where potential regulations on diversity and inclusion may be introduced by the Financial Conduct Authority and Prudential Regulation Authority later this year and as outlined in the Treasury Select Committee’s report on their inquiry into “Sexism in the City”, published in March 2024.
Whilst the Financial Services sector has consistently reported the highest pay gaps, they have also reported the biggest decreases in pay gaps compared to the previous year, alongside the Travel and Technology sectors. As with 2022/23, Public Administration, Health, Hospitality and Leisure continue to be the sectors with the lowest mean hourly pay gaps.
How we use analytics to gain an understanding of gender pay gap drivers
In order to make meaningful change to gender pay gaps, it is crucial to understand the main drivers of the pay gap and the appropriate actions needed. The demonstrative video below showcases our PwC diversity analytics toolkit that we use to help organisations understand pay gap drivers and movements in reported gender pay gaps. The type of analytics shown can help in understanding where barriers exist and where actions need to be focussed as to sustainably reduce pay gaps.
The changing reporting landscape
DE&I reporting is quickly evolving within a global landscape, looking beyond gender and at broader diversity lenses. UK gender pay gap reporting is now one facet amongst many other diversity lenses and reporting requirements.
It is important that organisations do not let this evolving landscape become a compliance exercise. Instead, reporting and transparency should be embraced, and organisations should focus on implementing actions that will drive meaningful change.
A spotlight on: UK mandatory ethnicity pay gap reporting
The topic of ethnicity and other types of pay gap reporting, such as disability, has increasingly become a focus point of discussion within the UK with government consultations, public petitions and parliamentary debates Increasingly, organisations have been voluntarily calculating and reporting their ethnicity pay gaps (along with other diversity pay gaps such as disability, socio-economic background, sexual orientation etc.), as a key aspect of commitment to DE&I within the workplace. These voluntary disclosures not only showcase transparency, but a shift in the UK market as more companies look in more detail at diversity more broadly and beyond gender.
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