A new report from accountants, PricewaterhouseCoopers (PwC), has found that there has been a fall in the mean gender pay gap for the third year in a row from 14.3% in the first reporting year, to 12.5% for the 2020/21 reporting year
Background
As we highlighted in a previous article, the Equality and Human Rights Commission (EHRC) formally announced on the 23rd February 2021 that the deadline for providing gender pay gap data for the reporting year 2020/21, was being moved to midnight on the 4th October 2021. Accordingly, enforcement action against those who fail to report their data by the new deadline will begin on the 5th October 2021. All of this was later confirmed on the Government website.
Had there been no extension of the deadline, then the deadline for public sector employers to report their data would have been the 30th March 2021, with a snapshot date of the 31st March 2020. For private sector employers and voluntary organisations, the deadline would have been the 4th April 2021, with a snapshot date of the 5th April 2020.
Nevertheless, despite calls from both the Equality and Human Rights Commission (EHRC) and the Government for organisations to report their gender pay gap data by the original deadlines, as of the 6th April 2021, just 2,445 employers (equating to 22.23%) had done so. And as of the 12th June 2021, just 3,735 employers (equating to 33.95%) had submitted their data.
PwC Report That Mean Gender Pay Gap Has Fallen
In their new report, PwC found that:-
- The mean gender pay gap has fallen to 12.5% for the 2020/21 reporting year, a third consecutive fall in the gap, and down from 14.3% for the first reporting year of 2017/18. In the 2020/21 reporting year, 58% of employers reported a fall in their mean gender pay gap
- The mean gender bonus gap fell from 37.6% in 2017/18, to 33.6% in 2020/21, with 68% of employers reporting a fall in the 2020/21 reporting year
- Of those that reported their data by the original deadline, a greater proportion of larger employers did so (i.e. 60% of those with 20,000 or more employees) compared with smaller organisations.
Nevertheless, the inclusion and diversity director at PwC, Katy Bennett, cautioned in relation to the reported year on years falls in the mean gender pay gap that: "In reality, with so many companies still to disclose their gender pay gap, it will only be after October that we get a true picture of this year’s reporting. This data will also likely give us a much richer picture of the impact that the pandemic has had on women compared to men. This is because the statistics reported will be in respect of those who were in employment, and not on furlough, in April 2020."
Furthermore, the PwC report focused only on the 1665 employers who have reported their data in each and every reporting year, and are at odds with the statistics produced by the Chartered Institute of Personnel and Development (CIPD), which found that the gender pay gap had simply remained constant over the last two years. The CIPD found that the median gender pay gap was 12.8% for the reporting year 2020/21, the same as for the reporting year 2018/19.
The PwC report, moreover, did not just focus upon the mean gender pay gap, but also looked at the median gender pay gap as well, and again found year on year falls going back the entire 4 years of reporting, unlike the CIPD report which found that the median gender pay gap had simply remained constant.
Mean Gender Pay Gap Fall: Reaction
The fall in the mean gender pay gap reported by PwC, mirrors similar findings of a consistent fall over time reported by the Office for National Statistics (ONS) in their 2020 report. The ONS found that "among full-time employees the gender pay gap in April 2020 was 7.4%, down from 9.0% in April 2019, [and that] the gender pay gap among all employees was 15.5% in 2020, down from 17.4% in 2019."
Nevertheless, the general reaction to the reports of a fall in the gender pay gap is one of caution, due to the impact of Covid-19. Joe Levenson, the director of communications and campaigns at Young Women's Trust, for instance, points out that: "We are concerned that this data is likely to already be out of date as a result of the devastating impact of the coronavirus crisis ......Young women on low pay were already struggling to get by before the coronavirus crisis hit and since then many have already suffered a loss of earnings due to redundancy, furlough or juggling precarious and insecure work with caring responsibilities."
Sam Smethers, the chief executive at the Fawcett Society, also argues that: "While a fall in the gender pay gap is positive, we only have a partial picture because the impact of coronavirus means a quarter of employers are missing from the data set.....They are likely to be the ones hit hardest by the pandemic."
