Despite decades of discussion and legislation, the gender pay gap remains a persistent issue of UK businesses. While some progress has been made, it remains lagging, signalling the need for businesses to move beyond reporting data and take meaningful steps to address the underlying causes of gender pay gap.
Data from the Office for National Statistics (ONS) reports that the gender pay gap among all UK employees was at 12.8% in April 2025, down from 13.1% in April 2024. While this shows progress, it is worth highlighting that women working part-time earned more per hour than men in 2025.
Looking at the wider picture, women are more likely to work part time, and part-time roles generally attract lower hourly earnings compared to full-time jobs. Therefore, it is important for businesses to look beyond the headline figures and understand the critical factors that shape women’s earnings and career progression.
Why the gender pay gap persists
A significant contributor is the motherhood penalty. A significant number of women today continue to remain as the primary care giver of family and childcare responsibilities, often trying to balance these responsibilities with employment. According to the House of Commons Library, 37% of women worked part-time in 2025, compared with 14% of men. This imbalance can impact on career trajectories. While part-time work is not detrimental to career progression, difficulties arise when businesses associate commitment and leadership potential to long working hours and presenteeism.
Gender pay gap reporting
In the UK, mandatory gender pay gap reporting only applies to organisations with 250 or more employees. And from Spring 2027, publishing an action plan becomes mandatory under the Employment Rights Act 2025. It is important to recognise that the gender pay gap is not the same as equal pay. According to the Equality and Human Rights Commission, equal pay means that men and women in the same employment performing equal work must receive equal pay. Whereas the gender pay gap is a measure of the difference between men’s and women’s average earnings across an organisation or the wider labour market.
For SMEs, the absence of mandatory gender pay gap reporting should not mean that the gender pay gap does not exist within their own businesses. Accountability is very important and SMEs can do this by taking meaningful action to identifying if a gender pay gap exists and to what extent. Doing this helps demonstrate commitment to fair employment practices and will support employee retention, attract diverse talent and improve brand reputation.
What should businesses do?
First, businesses should examine the gender pay gap data and assess where disparities exist for example, recruitment, promotion.
Second, examine the business’s flexible working policy and raise awareness about the practices available to employees. For example, flexitime, job-sharing, remote and hybrid working. However, flexibility should not come at the expense of career development. Businesses should ensure that the culture is one which does not perceive those who work flexibly as less committed.
Thirdly, review progression and promotion opportunities. There should be equitable access to leadership opportunities, professional development and mentoring schemes.
Closing the gender pay gap should be seen as a commitment from the business from the leadership team, managers and the wider organisation. Businesses that identify causes of a gender pay gap and take sustained action are better positioned to build fairer workplaces.
Key takeaways
- Office for National Statistics data shows the gender pay gap persists among all UK employees, driven in part by women being more likely to work part time in roles that generally attract lower hourly pay.
- The motherhood penalty is a significant contributor to the gap – a substantial number of women remain in lower-paid or part-time roles after having children, limiting career and pay progression over time.
- Mandatory gender pay gap reporting in the UK only applies to organisations with 250 or more employees, meaning most SMEs face no legal requirement to report, even though the pay gap can exist in businesses of any size.
- Businesses should start by examining their own gender pay gap data to identify where disparities exist, including in recruitment, promotion and reward decisions, rather than assuming the issue does not apply to them.
- Closing the gender pay gap requires reviewing flexible working policies, ensuring equitable access to leadership and promotion opportunities, and treating the commitment as one that runs from the leadership team through every level of management.
