What does your Pay Gap say about your organisation? 

As we approach International Women’s Day it seems particularly appropriate to talk about the Gender Pay Gap.  

In the UK, organisations employing more than 250 staff are obliged to report their Gender Pay Gap. The deadline for mandatory reporting is 4^th April 2025 (30^th March 2025 for public sector organisations), for the pay gap statistics calculated at the snapshot date of 5^th April 2024 (31^st March 2024 public sector). 

Since mandatory Pay Gap reporting was introduced in 2017, the pay gap has declined from 18.4% to 14.2% in 2023 (ONS data for median gross hourly earnings excluding overtime) but reports from the World Economic Forum suggest it will take 132 years to close the gender pay gap worldwide if the current trajectory continues.  

The intention behind pay gap reporting was clear. Organisations having to publicly report a pay gap, would surely feel compelled to address it and close it…  

Based on the reduction achieved over 6 years, the name and shame strategy clearly isn’t working. 

The public sector includes some of the worst offenders with almost nine-in-10 (87.6%) public sector organisations paying men more than women in comparison to just over three-quarters of private companies. 

Other pay gaps for ethnic and disabled employees exist too. Whilst there have been campaigns to make this reporting mandatory as well, so far, they have been unsuccessful. However, data from the Office for National Statistics shows that people of ethnic heritage or those with a disability are paid less than their White, non-disabled colleagues, with Women in those categories the worst off.  

So, if you are a small company, employing less than 250 people, do you even have to think about it?  

If you employ less than 250 staff, it is possible you haven’t ever measured or analysed your pay gap or reviewed whether your pay structures and decisions are generating pay equity issues. This lack of data can exacerbate and perpetuate historic inequalities, which could lead to greater inequities in progression and pay as the business grows. We therefore encourage organisations to consider pay equity early on – especially those who care about equality, diversity and inclusion. 

Andrea Rae, founder of Inspiring Reward Ltd, is part of our accrEDIted© Community and is committed to supporting organisations in developing pay and reward structures which are market competitive but also ensure fair and equal management of employee pay.  

While the first step to addressing potential pay gaps is reporting on your data and analysing what it is telling you, Andrea stresses the importance of developing an action plan to reduce pay gaps and ensure equal opportunities for progression, development and promotion. An action plan may include: 

• Introducing or reviewing job evaluation, to ensure jobs are sized correctly compared to each other and enable accurate pay benchmarking to the market. 

• Putting in place a clear pay policy, which outlines how and when pay decisions are made and clearly communicates to employees which factors will affect their individual pay, reducing the opportunity for bias and inequal treatment. 

• Reviewing barriers to progression in the organisation, such as flexibility in location and hours, to ensure that employees of all genders and ethnicities are given equal opportunity to develop and gain promotion to more senior roles. 

• Assessing talent acquisition processes to remove any bias or barriers to recruitment of women into higher paying senior roles. 

So, what does your pay gap say about your organisation?  

If you don’t have a pay gap, well done! Keep up the good work and be sure to include this information in your recruitment materials. In terms of talent attraction, candidates (particularly women) will value an employer who places a high value on equal opportunities. 

If it is lower than, or about the national average, are you already taking steps to address this? Make sure you have a robust pay and reward strategy and framework in place to continue to close the gap.  

If your gap is higher than the national average, or you don’t know what it is, it is time to take urgent action. Inequality does not right itself without intentional effort. 

At EDI Accreditation we believe a company that is genuinely committed to equality, diversity and inclusion will be striving to provide fair and equal pay for its employees.  

Pay Gap statistics are therefore an essential measure within our EDI Accreditation Framework© and is analysed as part of the accreditation process. For an organisation to become accrEDIted©, they must prove they are committed to providing fair and equal treatment of pay. For companies with an existing pay gap, the accreditation process helps identify where this has arisen, enabling them to take steady, measured action, often with a specialist partner like Inspiring Reward Ltd, to address and reduce the gap consistently over time. 

EDI Accreditation provides the first impartial, intersectional accreditation to provide a detailed benchmark of your current EDI performance and comprehensive report helping guide your ongoing journey of improvement. Becoming accrEDIted© not only reveals the essential insights (including Pay Gap data) required to create impactful change, but provides external, impartial validation and recognition of your current EDI commitment. To find out more about becoming accrEDIted© please get in touch.