No improvement in median gender pay gap for 2020 but number of employers reporting drops 77% compared with 2018

The reporting deadline for employers to file their gender pay gap figures for 2020 has just passed and we’ve carried out some initial analysis to get an understanding of the lay of the land.

We found the median gender pay gap was 12.8%, or for every £1 the median male worker earned the median female worker earned 87 pence. By contrast, our analysis finds that in 2019 women received 86 pence while in 2018 they got 87 pence for every £1 a man earned.

This suggests the gender pay gap has remained pretty constant over the past three years and indicates changes employers have made to close the gap have yet to take effect or that the pandemic has stalled progress. A more cynical reading of these figures could suggest that too many organisations are resting on their laurels and not doing anything to reduce the difference.

How many employers are reporting?  

What is much more striking is that the number of employers reporting their pay data has fallen over this period. While 10,833 organisations published their numbers for 2018, just 6,150 did so for 2019 and 2,440 for 2020.

The decline for 2019 is probably attributable to the government deciding to suspend enforcement due to the pandemic. This meant that employers didn’t have to report their information for the 2019/20 reporting year.

The further fall for 2020 is likely to be due to the decision to give employers an additional six months from the existing deadline to disclose their gender pay gap information. Instead of having to report by 5 April, they now have until 5 October 2021.

However, the CIPD would like to have seen more employers publishing their figures already. We see gender pay gap reporting as an integral part of an organisation’s fairness strategy. Without it, employers will lack a valuable tool to assess the fairness of how they recruit, manage, develop and reward their people. Not only is this useful for explaining to employees the rationale behind reward decisions and getting their buy-in, it’s also helpful when explaining pay actions to customers, investors and society.

Customer and investors are becoming more aware of ethical considerations, such as how employers treat their people, reflected in the take up of the voluntary Living Wage or the government consultation on the use of ‘Social’ factors when making investment decisions.

What’s more, society wants to see action in the wake of #metoo, the death of Sarah Everard, the rise in domestic and economic abuse, and recent allegations of widespread sexual abuseand expect organisations to play their part in tackling discrimination, abuse, and violence. Disclosure of gender pay gap data and a supporting narrative can help illustrate the actions that employers are taking to make the workplace more inclusive.

What impact has the pandemic had?

Of course, it’s very likely that the economic fallout from the pandemic will have had an impact on the number of employers who must submit gender pay gap data Some may have had to cut jobs, so reducing their headcount below the threshold of 250 employees that triggers the requirement to report pay information by gender. Others, especially in the retail, leisure and hospitality sector may have gone out of business.

However, whether or not employees are on furlough won’t affect the need to report. According to government guidance, furloughed employees should still be counted when establishing whether an employer’s headcount takes it to the threshold of 250.

But furlough will have an impact on some of the data that’s submitted. This means that for some workplaces, furlough could shrink the difference between male and female pay, while in others it might increase the difference.

We won’t know for some time the full impact of coronavirus on wages but some commentators have already argued the pandemic has set back gender equality by decades. Women have been disproportionately affected economically because they are more likely to work in sectors that have been shut down, like retail and hospitality. They are also more likely to have gone on furlough while schools were closed in order to look after their children or had to juggle work and childcare.

This should be impetus enough for employers to ensure they report their figures for 2021. The quicker that organisations submit their gender pay gap information the quicker we’ll be able to see how the picture is evolving, which should help ensure that the government creates the right policy interventions, at the right time, and implements them in the right way.

To help people professions report on their gender pay gap data during the COVID-19 pandemic, the CIPD has produced a guide and will be publishing similar guidance around ethnicity pay reporting in May. As my colleague Claire McCartney says: ‘The earlier that employers report their findings, the better position they will be in to take action and make meaningful change.’

Note: The CIPD analysis was carried out on 6 April 2021 at 07.00. As more employers subsequently disclose their data, the overall size of the median gender pay gap could change.

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