Gender pay gap reporting - analysing the 2020 results
13 October 2021
Employers had until 5 October 2021 to publish their gender pay gap statistics relating to April 2020. What have we learned from the results?
We last looked at this in April, just before the original gender pay gap reporting deadline. At that point, around 25% of affected employers had published their data. Now that all employers should have done so, what do the results tell us? As in our previous analysis, we have compared employers’ figures on a like-for-like basis.
1,250 missing employers?A total of 9,620 employers published their figures by the deadline, with a handful of others having done so just afterwards. One unlucky employer posted its figures just one minute too late, so will forever be marked as a “late report” on the government’s website. (Top tip: never assume government websites will work properly when you need them to.) The 9,620 reporting employers include 413 who did so voluntarily as they did not have at least 250 employees, leaving 9,207 that reported because they were required to.
The last time gender pay gap reporting was mandatory was in 2018, when a total of 10,833 employers reported data. This included 374 employers who voluntarily reported, leaving 10,459 who could be expected to report again.
This means there are 1,252 employers who have not reported this time for some reason. It may be that companies don’t exist anymore or no longer meet the 250-employee threshold and decided not to report. Or it could be that they wilfully ignored their obligation.
Another possibility is that there were employers that believed they did not have to report but should have done. Although furloughed workers are not included in the pay gap and quartile calculations, they still count towards an employer’s headcount. For example, an employer that furloughed 290 employees but kept just ten working normally would still have to report. This misunderstanding was a common mistake we saw when advising clients on gender pay gap reporting earlier this year, so we wouldn’t be surprised if it explains the reason for many of the 1,252 missing employers.
Gender pay gaps in 2020Our analysis in April showed that mean and median pay gaps had fallen by an average of around 0.5% and 0.7% respectively. Now that the dataset is more complete, however, the position is a little different. The graph below shows that mean pay gaps are 0.01% higher on average than in 2019, and median pay gaps are 0.47% lower.
This is something we expected, confirming a publication bias in the previous result – those employers with good stories to tell are more likely to publish early. Now that employers with less good stories to tell are included, the degree of change is less.
The graph shows another interesting thing – in each year, the change in median pay gaps is greater than the change in mean pay gaps. This suggests employers are having more success in reducing their median pay gaps than their mean ones. Why might this be?
Well, let’s first consider how each statistic is calculated. Mean pay gaps are affected by outliers such as highly paid CEOs. The pay of a small number of well remunerated individuals can expand the gap significantly. Median gaps are not affected in the same way since they are calculated from the man and woman in the middle. So, one possible explanation might be that employers are making progress in attracting women into better-paid roles (and retaining them), but such change is slower in relation to the most senior and highest-paid roles (e.g. CEO or executive director level).
More variation in the pay gaps
The figures also suggest a little more variation in the data. The graph below shows the standard deviation – the higher the value, the more variation and the bigger the “spread” (i.e. a greater proportion of employers with very big increases/decreases in their gaps). This could be because of Covid-19 affecting the figures. Depending upon the employer and its demographics, furlough could increase or decrease a gap by a large amount. Anecdotally, we have seen datasets where gaps have risen a lot because of the impact of furlough. For example, where a large cohort of lower-paid men are furloughed, mean and median pay for men will increase and so potentially will the gender pay gap.
Pay gaps by company sizeOur April gender pay gap reporting analysis showed that smaller companies were publishing bigger changes in their pay gaps. Mean pay gaps had fallen by an average of 1.0% among employers with 250-499 employees, compared to a 0.01% increase among the largest employers with 20,000 or more employees.
Now the full results are in, the position is a little different. As before, the largest employers have seen the biggest changes in their mean and median gaps, with both increasing by over 1% since 2019. Among other sized employers, those with 500-999 employees have generally seen the biggest reductions in mean and median pay gaps.
On average, bonus gaps fell slightly in 2020 compared to 2019 - the first year in which they have generally decreased. Bonus gaps are calculated from bonuses paid out in the period 6 April 2019 to 5 April 2020. This means that they will be largely unaffected by the pandemic. The 2021 set of bonus statistics will reveal more about how Covid-19 affected bonus payments.
Generally, at the employer level, we tend to see bonus gaps increase as the performance of a business improves. This is because men tend to be in more senior positions where there is opportunity to earn larger bonuses. The converse is also true, in that poorer company performance leads to reduced gaps. We might therefore expect to see bonus gaps fall in 2021 compared to 2020.
In 2018 and 2019, the general trends in gender pay gap statistics were that upper quartiles were seeing rising numbers of women, whereas lower quartiles were generally remaining similar. In 2020, this changed. The proportion of women in the upper quartile still increased amongst employers on average, but by a smaller amount. At the same time, the proportion of women in the lower quartile also increased but by a larger amount than previously.
The next graph shows that 51.61% of employers saw an increase in the proportion of women in their upper quartile between 2019 and 2020. Although this means most employers are seeing more women in their best-paid roles, it is a lower proportion than in 2019.
At the same time, an increasing proportion of employers have seen more men in their lowest quartile. 46.63% of employers saw an increase in the proportion of men in the lowest-paid quartile, up from 42.15% in 2018.
In the past, many employers have aimed for better gender balance at the top end of their business, largely ignoring other areas. However, a gender pay gap can only be eliminated completely if all areas of a business are balanced, not just the most senior and well-paid roles. These statistics might show that more employers are now also considering gender balance among the lower-paid roles in their business. (As mentioned above, however, it could be that the statistics are distorted by the impact of Covid-19 and furlough, which will have less of an impact on the 2021 figures.)
We provide support and assistance to dozens of employers every year with their gender and ethnicity pay gap reporting. Contact us to find out how we can help you.