April 2018 was the first time UK companies were mandated to report their gender pay gaps. This brought the issue of inclusion and diversity in the workplace to boardrooms across the UK.
This note sets out the lessons learned from year one and what’s next for UK business, beyond just gender pay.
The UK government’s first year of mandatory gender pay gap reporting revealed an average median pay gap of 18% in favour of men in business across the UK.* The extent of the gap ignited a broad conversation around the issue of inclusion and diversity (I&D) in the workplace in Britain.
Beyond the pay data itself, gender pay gap reporting brought the broader issues of occupational segregation, gender balance and female seniority into the spotlight – shifting the debate from the gender pay gap to the gender opportunity gap. As we look ahead, the question around equality of opportunity is where business is refocusing attention. Stakeholders look more closely at how organisations are addressing the structural issues underlying their pay gaps. From employees to government and media, there is increasing pressure on business to improve the representation of women in senior roles and take action to speed up change in their organisations. Meanwhile, the conversation has started to move beyond gender, with government now focussed on ethnic representation, and more and more businesses starting to build the internal data they need to better understand the composition of their workforce. Business is under the spotlight on I&D. There is increasing pressure for business to take meaningful action to advance diversity and drive inclusion as shown by our insight-led research interviewing stakeholders across the media, investment community and policymakers. Businesses will need to determine their point of view on the issue of I&D beyond gender pay. Companies need to understand why they are committing to diversity and what the business rationale is beyond the regulations if they want to be credible and authentic. Political scrutiny, investor influence and pressure from prospective and current employees within companies mean the issue of I&D is very much here to stay.
UK Inclusion and Diversity Team
* April 2017, based on estimates from the Annual Survey of Hours and Earnings, Office for National Statistics