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The UK gender pay gap has been consistently under-reported for more than 20 years. The Office for National Statistics' (ONS) methodology gave more weight to large and public sector employers, while under-representing smaller private firms, where gaps are often wider. The result: the true pay gap has been around one percentage point higher than official figures suggested.
While 1% may sound small, in practice it represents tens of thousands more women being paid less than men. For HR and reward professionals, this has clear implications.
Firstly, relying on national averages may give a misleading sense of progress. Employers should be cautious about benchmarking themselves only against ONS figures. Sectoral and organisational context matters: gaps in smaller or less unionised sectors are typically larger, and this is where many employers sit. While some industry comparison is sensible, telling employees a gap is not as bad as others is unlikely to inspire confidence.
Secondly, this revelation could intensify government action on gender pay gap reporting. Reporting is already mandatory for employers with 250 or more staff, and policymakers may be emboldened to extend those obligations. There will also be growing pressure for organisations to demonstrate meaningful progress, not just compliance, something already anticipated by provisions in the Employment Rights Bill.
Thirdly, reward and HR teams should take this as a prompt to revisit internal practices. Transparent pay structures, fair promotion pathways, and regular pay audits remain critical. Employees and candidates are increasingly alert to equity issues, and employers which underestimate their own pay gaps risk losing both trust and talent.
Ultimately, whether the UK gender pay gap is 7% or 8% is less important than the message, which remains unchanged: progress has been too slow, and the gap is persistent. Employers which analyse gaps regularly, publish honestly and transparently, and act on findings will be best placed to respond to future policy changes and to win the confidence of their workforce.
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