The Equality Trust releases their latest briefing ‘Closing the gender pay gap: a review of the FTSE 100’s progress’ a sector-by-sector analysis of FTSE 100 companies in terms of progress made in closing the gender pay gap. With the Government Equalities Office’s scheduled review of the regulations yet to be published, this research provides an assessment of the progress made by FTSE 100 employers since the introduction of the regulations. In addition, it reflects on the regulations themselves.
The findings paint a depressing picture of the slow progress FTSE 100 companies have made to narrow the gender pay gap over the first 3 years of reporting. At the current rate, it would take the average FTSE 100 employer just shy of 48 years to close the gender pay gap. This leaves women in a vulnerable position in the UK labour market, facing a variety of disadvantages resulting from wider structural inequality and past discriminatory practices. While there are clear areas of improvement to be made to gender pay reporting, its introduction has shone a light on the issue, and is effective in monitoring progress – or lack thereof – and enabling organisations to be held to account.
The existing gender pay gap disclosure regime’s reliance on market forces to close the gender pay gap limits progress to achieving gender pay equality. Whilst the current system increases transparency there is a lack of stringency driven by an aversion to “burdensome compliance’’. This has led to a regime that monitors, rather than proactively works to reduce, the gender pay gap. The Equality Trust identified over a third of FTSE 100 companies falling into one of four distinct groups who either saw their pay gaps rise over the first three years of reporting or have made little progress towards reducing their gender pay gap and therefore present a serious risk to efforts to close the UK’s gender pay gap.
The report makes several key recommendations for government, including; mandating that employers produce action plans to close identified pay gaps to be agreed with unions or other employee representatives; strengthening sector level initiatives to tackle the gender pay gap; conducting a methodological review of the figures disclosed by employers; mandating horizontal pay reporting to eliminate equal pay issues; and strengthening enforcement around the regulations.
Jo Wittams, Co-Executive Director, The Equality Trust, said:
“This report illustrates that after 5 years of light touch regulation, the UK’s top companies are still falling short of achieving gender equality when it comes to pay. This simply isn’t good enough, leading companies cannot continue to maintain obscure pay structures, import disadvantage through requesting salary histories and undervalue women’s work. Tackling the gender pay gap is a key mechanism for reducing economic inequality, which is a critical issue. However, the evidence exists to show that achieving gender pay equality is possible. Companies like Mitie Limited have shown substantial progress by narrowing their gap by 31.4%. This indicates that there is potential for change. We call upon the FTSE 100 to show bold leadership in this area, and for the government to strengthen the regulations to make the UK a world leader when it comes to closing the gender pay gap.”
Jemima Olchawski, Chief Executive, Fawcett Society said:
“We’ve long called for changes to strengthen the system so that employers are held accountable for the actions they are taking to tackle the gap. The scheme also needs to be expanded to shine a light on the intersecting forces of discrimination impacting all women including women of colour and disabled women. Doing this voluntarily is simply not enough.
More broadly, the spiralling cost of living crisis, on the back of Covid, means we are at a critical juncture that demands Government action. Over 50 years have passed since the Equal Pay Act, yet the gap persists. We need urgent structural change to end it now and make workplaces work for women – the childcare system needs to be fixed, paid parental leave reformed, and flexible work made the default by requiring employers to advertise jobs with flexibility built in.”
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Note to editors
1- Four distinct group categories employers fall into:
- Employers with initial median pay gaps of over 10% who saw their pay gap increase by 5% or less from 2017/18 to 2019/2020
- Employers with initial median pay gaps of over 10% who saw their pay gap increase by more than 5% from 2017/18 to 2019/2020
- Employers with initial median pay gaps of under 10% whose effective (i.e. above 0) median pay gap increased by 5% or more from 2017/18 to 2019/2020
- Employers with initial median pay gaps of over 10% whose pay gap had reduced by less than 5% of its initial figure from 2017/18 to 2019/2020
2- The Equality Trust is the national registered charity that works to improve the quality of life in the UK by dismantling structural inequalities of income, wealth and power. For further comments or to arrange an interview, contact Jo Wittams jo.wittams@equalitytrust.org.uk.
3- The full report and executive summary can be read on our website.