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Year 6 Gender Pay Gap Reporting 2022/23
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Reflecting on the latest findings
Katy Bennett - Diversity, Equity and Inclusion, PwC UK
View TranscriptAlthough we are now in the sixth year of gender pay gap reporting, we see scrutiny of this measure continue to grow. The gender pay gap is increasingly a key metric within sustainability reporting frameworks (as part of the ‘S’ of ESG). At the same time, new requirements are being introduced internationally which include, for example, the EU Pay Transparency Directive which will likely take effect in 2026.
Our gender pay data analysis shows that the pay gap has remained the same, or worsened, for just under half of organisations who reported in 2022/23 and 2021/22. Of those companies that have disclosed their pay gaps for both reporting years, just over half (53.7%) reported a decrease in their mean pay gaps, with an average decrease of only 0.4%.
Key trends
Our analysis shows a decrease of 0.7% in the mean pay gap from 12.9% to 12.2%, and a decrease of 0.6% from 9.8% to 9.2% for the median hourly pay gaps compared to the prior year.
Encouragingly there have seen larger decreases to both the mean and median bonus gaps over the reporting period this year.
Size of change in mean pay gap from 2021/22 to 2022/23
Over 35% of companies reported pay gap changes between 0 and 1%, with, disappointingly, an almost equal split between those reporting increases and those reporting decreases.
Size of change in mean pay gaps by organisation size since 2017/18
Our analysis shows that for larger companies, the mean hourly pay gap is decreasing at a slower rate than it was from 2017/18 to 2020/21.
Unsurprisingly, there is increased volatility in the mean pay gaps of the smallest organisations (less than 250 employees), where a single employee can have a more significant impact on overall average pay due to the smaller overall employee population.
Sector trends
Our analysis shows that despite being amongst the sectors with the largest decreases in mean gender pay gaps, the building societies, banking and insurance sectors continue to have the highest mean hourly pay gaps in 2022/23.
Public administration, health and leisure are the sectors with the lowest mean hourly pay gaps.
Moving beyond the Gender Pay Gap
Many organisations continue to use social context and external challenges to explain the slow progress on their gender pay gap figures. However, as we enter the seventh year of reporting, for some stakeholders simply reporting the gender pay gap figures is no longer enough. The pressure to be transparent about pay (internally and externally), make commitments to broader fairness, and take active strategic steps to improve overall equity is mounting. Organisations that fail to step up risk being left behind.
Our analysis highlights that many companies are still struggling to make meaningful progress on the gender pay gap - so what can companies do differently? The focus needs to move beyond reportable numbers to understanding the underlying inequalities that are contributing to these gaps.
Key actions for organisations to consider:
Analyse the main drivers of your gender pay gap and other metrics that your organisation reports (e.g. ethnicity pay gaps).
Understand broader inequalities within your organisation that may be influenced by external social factors (e.g. lower availability of female talent in certain areas).
Identify key actions that will help to mitigate these underlying drivers and inequalities, both within your organisation and outside it.
Identify and analyse how these actions will impact your gender pay gap and other reported metrics in the short, medium and longer term.
Share these actions and their impacts with your stakeholders, including recognising where changes may be positive for equity, but have limited short term impact on the pay gap.
Use this approach to shift communications, goals and strategy from an output driven focus to input driven actions.
Continuously communicate on progress and monitor and improve actions, recognising failures as well as successes.
Looking ahead
Embracing broader Diversity, Equity and Inclusion reporting
DE&I regulations are continuing to gain momentum around the world and the gender pay gap is now only one metric amongst many. There is an opportunity within this evolving landscape to embrace a broader perspective by aligning multiple metrics and requirements to tell an accurate story of DE&I within your organisation.
Evolutions to the landscape and key areas to think about
Watch these videos to discover more about the key areas organisations can explore
To prepare for the impact of broader DE&I and sustainability reporting it will be critical for DE&I teams to:
Monitor for new sustainability reporting requirements that will apply to your business.
Work alongside your sustainability teams or sustainability experts to identify where there are requirements that are DE&I related and agree the owner of these disclosures.
Look to build a consistent reporting narrative across all social dimensions, including DE&I.
Carry out risk assessments to identify any changes required in order to comply with new regulations as and when they are released.
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Embrace a broader perspective
Katy Bennett - Diversity, Equity and Inclusion, PwC UK
View TranscriptPreparing for the EU Pay Transparency Directive
The EU Pay Transparency Directive was adopted by the EU Parliament on 30 March 2023. The Directive will require organisations with workers in an EU territory to implement a series of measures that will support pay transparency, essentially bringing requirements related to gender pay gap reporting and equal pay across the EU. Whilst the requirements under the Directive will likely not come into effect until 2026, the nature and breadth of the changes required means that organisations need to start planning now.
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