Most British workers are likely to underestimate the extent of the gender pay gap, according to a new survey by HR software provider CIPHR.

The survey found that despite a vast majority of respondents (96%) that agreed that the UK has a gender pay gap, over half (57%) of people said there is no gender pay gap where they work.

The extent of the gender pay gap – a lack of understanding

The survey of 1,000 workers across mainly medium to large organisations shows “a significant disconnect between the reality and perception of men’s and women’s earnings in the same organisation”, which could sustain the gender pay gap.

Interestingly, more women than men thought there was no gender pay gap in their organisation (59% of women compared to 52% of men). The findings also revealed greater concern about gender pay disparities by age. Two-fifths (40%) of workers under-35 felt their employers paid their male staff more, compared to around a quarter (27%) of workers over-45.

While many UK workers may have heard of the gender pay gap, few are clear on the details. When asked to identify the current pay gap, opinions varied among respondents – the mean average answer was 37% (the median was 33%). A third of people (33%) thought it was over 50%.

According to the Office for National Statistics (ONS), the gender pay gap was 15.5% in 2020, a figure which is based on median gross hourly earnings for all workers. The lack of awareness of the real gender pay gap is revealed in the fact that only one in 20 survey respondents (5%) got it right at 15% or 16%.

However, a positive finding was that only 4% of survey respondents thought the UK’s gender pay gap is zero, indicating an awareness of the pay disparities between men and women in the workplace.

Trends by seniority, sector, gender and race

Respondents in senior management positions were more likely to report that their organisation does have a gender pay gap (52%), out of this number, 45% said the pay gap was in favour of men.

In terms of sector, those working in IT and software, transportation and warehousing, and construction reported the highest average gender pay gap figures and estimated that employers pay their male staff over a third more than their female staff (41%, 38% and 38% respectively).

When it comes to job hunting, 58% of women said they wouldn’t apply for a job with an organisation that has a gender pay gap compared to 38% of men.

Women are also more likely to not work for an organisation that has an ethnicity pay gap, compared to men (54% and 37% respectively). For Black women, that figure rises to 57%, and for Asian women, it’s 71%.

The reality of the gender pay gap in the UK

While there are some businesses that have no gender pay gap, these are very few; according to the Government’s 2020-21 gender pay gap report, most organisations (79.8%) that have over 250 employees in the UK pay their male employees more than their female employees.

For the companies that have published their gender pay gap figures for the 2020-21 reporting year, where the official deadline is 5 October 2021, only one in eight (12.6%) pay women more, and only one in 13 firms (7.6%) reports having no pay gap.

Closing the gender pay gap

To help close the gender pay gap, the survey recommends that firms become “more transparent about the decision-making processes for promotions and career advancement” including disclosing salary ranges, pay and bonuses. They also suggest using HR systems for reporting and to identify potential areas for improvement, and introducing minimum gender and diversity quotas at the interview stage.

Interestingly, the survey found that two-thirds of respondents believe that gender pay gap reporting and ethnicity pay gap reporting should be mandatory for all UK companies regardless of their size (69% and 61% respectively).

However, there appears to be a culture of secrecy around salary disclosure in UK workplaces, where 37% of respondents said they are “actively discouraged from talking about their salaries with their colleagues and co-workers despite them having the legal right to do so.” There was also one in 20 respondents, (5%) who said they are banned from disclosure “because of pay secrecy clauses in their contracts.”

Commenting on the findings, Claire Williams, Director of People and Services at CIPHR said: “It’s interesting to see that so many people trust their employers not to have a gender pay gap – particularly when so many do and when this information is publicly available on the Government website. These results highlight the importance of reporting and communicating gender pay gap figures – and what they mean – to employees, however, employers should use the gender pay gap reporting legislation as an opportunity to really use the data to drive change within their organisation and not just as a ‘tick box’ exercise.

“The UK’s gender pay gap is slowly closing thanks to years of reforms and inclusive policies and initiatives. But these changes don’t just happen by themselves. Better representation of women and ethnic minorities at all levels, in all roles, across all organisations, is vital to ensuring that pay gaps are reduced more quickly. It’s also the best way of ensuring that organisations attract and retain the best employees, and has a significant impact on overall company performance. As detailed in the McKinsey 2020 ‘Diversity Wins’ report, the business case for diversity and inclusion (D&I) is stronger than ever, and the direct link to financial outperformance continues to strengthen – employers should take note of these key areas of research.

“For the 2020-21 reporting year, CIPHR reported a negative median gender pay gap of -6% (meaning that the median hourly pay for men was 6% lower than women), a change from 7% in both 2019 and 2018 (meaning that the median hourly pay for men was 7% higher than women). While this is in many ways incredibly promising news, we ultimately want to get the gap to as close to zero as we can.”

To read the full gender pay gap survey by CIPHR, click here.