Mandatory action plans could reshape gender pay reporting

An analysis by Pinsent Masons of the most recent gender pay gap data published by large UK employers shows that progress toward reducing pay inequality between men and women is happening, but remains slow and uneven across industries.

For 2024–25, the average median hourly gender pay gap was recorded at 11.28%. This represents a reduction of almost 0.3% compared with the 2023–24 reporting cycle. While this is a modest improvement, the figures suggest that structural inequalities persist and remain deeply embedded across many sectors of the economy.

Some industries continue to show far wider gaps than others. The infrastructure sector reported the highest median hourly gap at 21.04%, only a marginal decrease of 0.36% from the previous year. Financial services followed closely, with a gap of 20.36%, again reflecting only a slight year-on-year improvement. Energy, manufacturing, higher education, and telecommunications also report persistent disparities, though to varying degrees.

Representation in Senior and Lower-Paid Roles

One positive trend can be seen in the proportion of women occupying the top quartile of salary ranges. In 2024–25, women made up 41.71% of the highest-paid roles. This builds on the steady upward trend over recent years: 40.54% in 2021, 41.07% in 2022–23, and 41.38% in 2023–24. The figures suggest a gradual improvement in women’s representation at senior levels.

However, this progress is undermined by the fact that women continue to be disproportionately represented in the lowest-paid positions. In the most recent reporting year, 54.72% of employees in the bottom quartile were women. Although this represents a very slight reduction of 0.14% compared to last year, it highlights the persistence of occupational segregation and the challenges in ensuring fair progression opportunities throughout the workforce.

The Role of Mandatory Action Plans

Since mandatory gender pay gap reporting was introduced in 2017, most industries have shown at least incremental improvement when compared with their 2017–18 baselines. This suggests that public reporting, combined with employer-led initiatives and wider scrutiny, has encouraged change. Nevertheless, the framework has faced criticism for lacking sufficient enforcement powers, particularly because employers have not been required to explain how they intend to address disparities.

The proposed Employment Rights Bill (ERB) could change this dynamic significantly. At present, fewer than half of reporting employers voluntarily publish action plans outlining steps to reduce the gender pay gap. The ERB would make such plans mandatory for large employers – defined as those with 250 or more employees. This would mark a shift from transparency alone toward accountability, as businesses would need to set out concrete measures and track their progress.

The ERB also proposes the introduction of menopause action plans, aimed at ensuring that workplaces better support women affected by menopause. Alongside this, the government has signalled its intention to make ethnicity and disability pay gap reporting mandatory, with draft legislation expected in the near future.