49% of employers report little gender pay gap progress

Association of Accounting Technicians reduces gender pay gap to 4%Almost half of employers made little or no progress with their gender pay gap in 2020, with just 1% significantly reducing it, according to research.

Investment adviser Mercer’s UK gender and ethnicity pay gap trends report found that 49% of organisations surveyed had not reduced the difference in average pay for men and women in the 12 months leading up to the start of the pandemic. Just one in 100 had cut the gap by more than 10%.

Three-quarters of those polled disagreed with the government’s decision to suspend gender pay gap reporting – which is generally mandatory for larger firms – in 2020. A similar proportion (74%) reported their numbers to show a continued commitment to inclusion despite the suspension – but there has been minimal progress made in closing the gap.

Fewer than one in three employers (30%) told Mercer they had reduced their gender pay gap by 2% or more between 2019 and 2020, while 18% reported an increased gap.

Meanwhile, two-thirds (65%) of respondents supported introduction of legislation forcing ethnicity pay gaps to be reported on and addressed, and 45% claimed they felt under pressure to conduct an analysis on the subject.

Despite ethnicity pay gap reporting not being a legal requirement in the UK, 74% have collected data or are planning to do so in the future. More than half of organisations polled (57%) are conducting a dry-run analysis to calculate ethnicity pay gaps, and 31% have published or are planning to publish this data.

Michelle Sequeira, diversity, equity and inclusion consulting leader at Mercer UK, said the key drivers of gender pay gaps range from issues with attracting and retaining women, to failing to eliminate the barriers to career progression that prevent female employees from entering more senior roles.

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She encouraged employers to conduct deeper analysis to get to the root of the problem, and to put action plans in place, as engaging and upskilling senior leaders is critical.

“In addition to examining ethnicity pay gaps, our report encourages employers to widen the pools from which they recruit and take steps to reduce unconscious bias in processes,” Sequeira said. “Most important of all is creating a genuinely inclusive workforce that allows people to be themselves and thrive both in and outside of work.”