Addressing the Persistent Gender Pay Gap in UK Businesses
Despite decades of discussion and legislation, the gender pay gap continues to be a significant challenge within UK businesses. Although some progress has been made, the pace of change remains slow, underscoring the urgent need for organisations to move beyond merely reporting data and take concrete actions to tackle the root causes of this disparity.
According to the Office for National Statistics (ONS), the gender pay gap among all UK employees was 12.8% in April 2025, a slight improvement from 13.1% in April 2024. Interestingly, the data reveals that women working part-time earned more per hour than men in 2025. However, this statistic only tells part of the story.
Women are disproportionately represented in part-time roles, which typically offer lower hourly earnings compared to full-time positions. This highlights the importance for businesses to look beyond headline figures and understand the nuanced factors affecting women’s earnings and career development.
Why the Gender Pay Gap Persists
One of the most significant contributors to the gender pay gap is the “motherhood penalty.” Many women continue to bear the primary responsibility for childcare and family care, often balancing these duties alongside their employment. Data from the House of Commons Library indicates that 37% of women worked part-time in 2025, compared to just 14% of men. This disproportionate engagement in part-time work can influence career progression negatively.
While part-time work itself should not hinder advancement, challenges arise when businesses equate commitment and leadership potential with long hours and physical presence in the workplace. This cultural perception can limit the opportunities available to women, reinforcing pay disparities over time.
Understanding Gender Pay Gap Reporting
In the UK, mandatory gender pay gap reporting applies only to organisations with 250 or more employees. Starting in Spring 2027, the Employment Rights Act 2025 will require these organisations not only to report data but also to publish an action plan addressing pay disparities. It is crucial to distinguish between the gender pay gap and equal pay. The Equality and Human Rights Commission clarifies that equal pay means men and women in the same employment, performing equal work, must receive equal pay—a legal entitlement. The gender pay gap, by contrast, measures the average earnings difference between men and women across an organisation or the broader labour market.
For small and medium-sized enterprises (SMEs), which are not currently subject to mandatory reporting, this does not mean the gender pay gap is absent. Accountability remains vital. SMEs can demonstrate their commitment to fairness by voluntarily assessing their pay practices, identifying any gaps, and taking informed steps to address them. This approach not only promotes equitable workplaces but also enhances employee retention, attracts diverse talent, and improves brand reputation.
What Should Businesses Do?
To effectively close the gender pay gap, businesses should begin by thoroughly analysing their pay data to pinpoint where disparities exist, such as in recruitment, promotions, or pay awards.
Next, organisations should review and enhance their flexible working policies. Raising awareness about options like flexitime, job-sharing, and remote or hybrid working arrangements is essential. However, flexibility should not come at the cost of career progression. It is critical to cultivate a culture where employees working flexibly are not viewed as less dedicated or less capable of leadership roles.
Finally, businesses must ensure equitable access to progression and promotion opportunities. This includes providing fair access to leadership roles, professional development, and mentoring programmes.
Closing the gender pay gap requires sustained commitment across all levels of an organisation—from the leadership team to line managers and every employee. Companies that identify the underlying causes of their pay gap and implement long-term strategies are better positioned to create fairer, more inclusive workplaces.
Key Takeaways
- ONS data confirms the gender pay gap persists across UK employees, partly because women are more likely to work part time in lower-paid roles.
- The motherhood penalty remains a major factor, with many women moving into part-time or lower-paid roles after having children, affecting career and pay progression.
- Mandatory gender pay gap reporting applies only to organisations with 250+ employees, leaving many SMEs without a legal obligation to report despite potential pay disparities.
- Businesses should proactively examine their own pay data to uncover disparities in recruitment, promotion, and pay decisions rather than assuming the issue does not affect them.
- Closing the pay gap involves reviewing flexible working policies, ensuring equal access to leadership, and embedding commitment to fairness at all organisational levels.
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