Gender pay gaps widen at many of the UK’s biggest employers

Latest figures show that many of the country’s largest employers have failed to address the disparity in pay between their male and female staff. And, in several instances, the pay gap is actually widening

British Airways Gender Pay Gap
British Airways is among the large UK employers that has seen its gender pay gap widen the most since reporting was first introduced

Last week, the Oscar-winning actress Olivia Colman claimed that she’d be earning “a fuck of a lot more” if she’d been called Oliver. While she was only referring to Hollywood’s gender pay gap, the same general rule remains true across the UK economy, where women continue to be paid less than men, on average.

Around 78.4% of UK employers pay men more than women, on average, according to our analysis of the latest figures filed with the government’s Gender pay gap service. The average gender pay gap stands at 11.6%, a slight improvement on last year’s figure of 12.2%.

Since 2017, it has been a legal requirement for all UK employers with 250 or more staff to report their gender pay gap data. Although it was hoped that the increased transparency would help to eliminate differences in pay, the gap has only marginally narrowed over this period. 

Jemima Olchawski, CEO of the Fawcett Society, a charity campaigning for gender equality, says: “Progress on closing the gender pay gap is glacial and, unless more is done, we risk simply settling on the fact that, on average, women will always be paid less than men.” 

A growing gender pay gap

The nation’s biggest companies have always tended to have narrower pay gaps than those prevalent among SMEs. However, among the 59 companies with headcounts exceeding 20,000 to have published their pay data this year, there has been no improvement.

Raconteur analysis shows the average gender pay gap among these companies was 8% – only marginally higher than last year’s 7.9% figure and a slim improvement on 2017’s average of 9.4%.

Between 2017 and 2023, the median hourly gender pay gap has widened at 20 of the UK’s largest employers. While some of these have only been slight – such as University Hospitals Birmingham NHS Foundation Trust’s 0.7 percentage point increase or Jaguar Land Rover’s overcorrection (it now pays women 3.9% more than men, on average) – other companies have clearly struggled to address their gender pay differences.

BT, for example, has seen its median hourly gender pay gap shift from 2.3% in favour of women to 9% in favour of men, between 2017 and 2023. The telecoms company attributes this to the “low representation of women at all levels across the company, including senior level roles”. Only 28% of positions at the company are occupied by women. 

The retailer Next has seen its median gender pay gap widen by over 15 percentage points. Some 2,000 of its employees are currently engaged in an equal pay dispute over the difference in pay between Next’s predominantly female sales consultants and its mostly male warehouse operatives. The case progressed to the final stage last year and is due to reach a conclusion next month.

British Airways has seen its median gender pay gap increase from 10% to 37% – more than any other employer with 20,000 staff or more over this six-year period. In a statement, the company explained that this is due to industry-wide challenges, such as the over-representation of women in cabin crew roles and the comparative lack of female pilots. When these two roles are excluded from its pay gap figures, the median pay gap reduces to 10%. 

Dr Michelle Tessaro, visiting professor at Cranfield School of Management and a specialist in gender equity, explains: “The gender pay gaps that we see today are largely a result of the gender segregation of roles. Jobs traditionally held by women tend to be paid lower and women are under-represented in senior-level jobs. Both challenges can be attributed to entrenched gender norms and hierarchies that continue to favour men.”

The finance sector is further evidence of this. HBOS, NatWest and divisions of Lloyds and Barclays all have median gender pay gaps in excess of 20%. At 37.4%, Lloyds Bank has the largest median hourly gender pay gap of all the companies we reviewed, although this was an improvement on last year’s 40.9%.

This disparity within the banking industry remains largely due to the fact that men continue to outnumber women in senior roles. At Lloyds Bank, for example, women occupy 36.5% of the highest paid jobs and 68.1% of the lowest paid jobs. Bonuses are also unevenly distributed, with the median bonus pay favouring men by 54.7%.

“In too many cases, women are still considered to be the risky choice, regardless of their experience, achievements and potential, making it all too easy to go back to traditional (gendered) criteria that see men selected for top jobs,” says Tessaro. 

Closing the gender pay gap

There are some signs of improvement. Although overall progress has been uneven, Tessaro says, “there have been some companies that have embraced gender diversity, making it a strategic priority, and have seen a narrowing of the pay gap in their organisations as a result.”

Outsourcing company Mitie has closed its gender pay gap by 24.2 percentage points since 2017, bringing the median difference down from 31.4% to 7.2%. However, this is a slight increase on last year and men still outnumber women in the highest-paid positions at the company.

Other organisations have made significant progress in closing their gender pay gaps since reporting was made compulsory. These include Morrisons, Greggs and Home Bargains, which now pays the median man and woman at the business equally.

Openreach was one of the few large employers to disproportionately compensate women. In 2017, women at the BT Group subsidiary were paid £1.21 for every £1 earned by men, when comparing median hourly pay. Today, this gap has closed to a difference of just 2p.

Another company that has successfully narrowed its gender pay gap is Diageo. The alcoholic drinks company – which owns Guinness, Smirnoff and Baileys, among others – reported that the median hourly pay for women was 16.3% higher than men’s in 2022/23. This year, the difference has been reduced to 2%.

Taking a holistic approach to improving diversity has been key to making progress in this area, a spokesperson for the company claims. Examples of these efforts include establishing employee resource groups, nurturing female leadership talent, making changes to its recruitment processes and introducing employee policies that foster greater inclusion. 

But these businesses remain the minority. If the intention was that greater transparency would effectively shame companies into taking action to close their gender pay gaps, the evidence so far shows that this has not worked. 

“Addressing biased organisational structures in a challenging economic and geopolitical environment becomes even more difficult as gender diversity policies and initiatives slip to the bottom of the agenda,” Tessaro says. “Add to that a growing gender fatigue and backlash, not only is further progress threatened but so are the hard-won achievements to date.”

Olchawski believes that, if progress is to be made, employers should be required to publish action plans, alongside the data, that detail how they will close their pay gap. This will allow for companies to be held to account if improvements are not made. “The gender pay gap is bad for women, bad for business and bad for our economy,” she adds. “It must be closed.”