
Bonuses and incentives
Understand the basics of bonuses and incentives, the trends in their application, and how to design and operate schemes effectively and ethically
With gender pay gaps reported at their lowest since 2017, Charles Cotton and Esmeralda Bon look at the progress made by large British firms and at the role of HR teams in reporting
The UK government plans to extend pay gap reporting to ethnicity and disability, and is consulting on this proposal as well as calling for evidence around the impact of pay transparency. The CIPD will respond to both, and members are encouraged to contact the CIPD with any evidence they might have on this topic.
Government data on the current state of the gender pay gap in the UK is based on pay information collected by workplaces on the snapshot dates of 31 March 2024 (public sector employers) and 5 April 2024 (private and voluntary sector), which organisations needed to submit within 12 months. The requirement to publish this data applies to all British employers with 250 or more people and the Northern Ireland Assembly is currently considering whether its large employers should follow suit.
The data shows that the size of the gender pay gap in Great Britain was 8.6% in 2024. This means that a typical female employee earned 91 pence for every pound received by a typical male employee (as measured by the median).
Another way to analyse the gender pay difference is by the mean pay, which finds the mean pay gap is 11.2%. This means that the typical female employee earns 88 pence for every pound received by the average male employee (as defined by the mean). The mean is higher because it has been pushed up by a small number of men who are paid very highly. This means that the median is more representative of what people earn as it is the midpoint of the range.
It is important to recognise the difference between requirements under equal pay legislation and those relating to gender pay gap reporting. The law gives a woman the right to the same pay as a man (and vice versa) when carrying out 'like' work, work rated as equivalent as defined by an analytical job evaluation study, or is classed as being work of equal value. This is a right that the government is considering extending to ethnicity and disability.
However, gender pay gap reporting does not compare men and women doing the same work, equivalent work, or work of equal value, as would happen as part of an equal pay audit. Instead, this type of reporting compares the mean and median female pay with that of mean and median male pay at the same workplace.
Often this type of reported pay gap is driven by several factors, such as the imbalance between men and women at senior levels, occupational segregation, societal assumptions about the jobs that men and women should do, or the career advice given in schools.
The pay gaps reported are the lowest since reporting began in 2017 (median 9.3% and mean 13.4%) and this has been as part of a gradual decline.
Currently, the law does not require workplaces to explain or account for the size of their gender pay gaps. Nonetheless, the government encourages employers to publish a narrative or commentary explaining their figures and any actions they are taking. When submitting their gender pay data to the government reporting website, employers can also give an online link to their narrative that people can access. In the first year of reporting, 74% of employers submitted a link to their narrative. But since then, the percentage has fallen to 52%.
When submitting gender pay gap figures on the reporting website, private and voluntary sector employers must also submit a statement confirming its accuracy, which must be signed by a director or equivalent and include their name and job title.
Looking at the job titles given by the person responsible for submitting their organisation’s pay gap figures, we find that there has been an increase in the proportion of submissions from those working in HR. Table 1 shows that in the reporting period 2017/18, 34% of all submissions were made by an HR professional, and this proportion grew to 48% in 2024/25.
The big jumps occurred between 2019/20 and 2021/22, coinciding with the COVID-19 pandemic, the shift to hybrid working, and the cost-of-living crisis. During this period, many workplaces turned to their people professionals to lead the way in managing the organisational impact of external pressures, and one consequence has been the greater role of the profession in workforce reporting.
Firms who have HR people responsible for this reporting – rather than finance or senior leaders – are more likely to include a response as to how they plan to tackle their gender pay gap. However, the proportion of firms who include an explanation has decreased.
Table 1: HR professionals more likely to be responsible for reporting data
Reporting year | % submitted by HR-related* responsible person |
2017–18 | 34.0% |
2018–19 | 37.6% |
2019–20 | 40.8% |
2020–21 | 44.7% |
2021–22 | 47.5% |
2022–23 | 46.6% |
2023–24 | 47.8% |
2024–25 | 47.9% |
*Someone whose job title includes: “HR”, “Human Resources”, “People”, “Reward”, “Pay”, “Benefits”, “Compensation”, “Personnel”, “Remuneration”, and “DEI”. Those without any job title information were excluded.
The failure in trying to encourage employers to produce a narrative might explain why the government is now considering introducing equality action plans. As part of its Employment Rights Bill, new rules in this area will make it compulsory for all employers in Great Britain with 250 or more staff to submit a plan explaining their steps to tackle their gender pay gap. Such a plan could cover the steps chosen and why, the impact to date, planned actions, and so on.
In addition, the government is consulting on whether it should extend the requirement to publish pay data on ethnicity and disability. It is also looking for evidence around the impact of greater pay transparency, such as:
The UK Government is not alone in exploring pay transparency. The EU Pay Transparency Directive looks at establishing similar rules on pay transparency, and will be something that all EU members must comply with by the end of 2026. This will also affect companies that have operations in the EU and possibly Northern Ireland. The US has also seen several states implement pay transparency initatives. As well as applying to large organisations, many of these US and EU initiatives also apply to smaller-sized employers.
The CIPD will respond to both the consultation and call for evidence. Members are encouraged to contact the CIPD with any evidence on this topic they may have.
HR professionals can also use the following resources in this area:
Charles has recently led research into the business case for pensions, how front line managers make and communicate reward decisions, and managing reward risks, as well as the creation of a good practice guide on the annual pay review process. He is also responsible for the CIPD’s public policy work in the area of reward and is a Chartered Fellow of the CIPD.
Esmeralda has extensive experience analysing survey, interview and social media data, focusing on public opinion at a macro level and individual preferences at a micro level.
She holds a PhD in Political Science from the University of Nottingham and MA and MSc by research degrees from the University of Amsterdam in Applied Linguistics and Communication Science, respectively.
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