PwC analysis finds Irish firms have average gender pay gap of 12.6 per cent

PwC Ireland analysed the gender pay gap reports of up to 500 companies who disclosed their data to assess the key trends. The end of last year (31 December 2022) was the deadline for the first reporting period under the Gender Pay Gap Information Act 2021 for companies with in excess of 250 employees obliged to report.

The analysis revealed a mean gender pay gap of 12.6 per cent across Irish organisations which published reports in December 2022. This compares to Ireland’s latest available national gender pay gap of 11.3 per cent (2019) and an EU average gender pay gap of 13 per cent (for 2020), based on Eurostat data.

Although the exact reason for a gender pay gap varies by company and sector, a key factor appears to be the relatively high number of men in more senior (and so, more highly paid) roles. Looking at disclosures on pay quartiles, three-quarters of companies appear to show a higher relative proportion of men in the “highest paid” quartile. The more men a company has in these top quartiles relative to the number of women, the higher that company’s pay gap is likely to be.

Other key findings

– The gender pay gaps published in December 2022 were widest in the finance, banking, insurance, legal and construction sectors.

– Although the exact reason for the gender pay gap varies by company and sector, a key factor appears to be the relatively high number of males in more senior (and so, more highly paid) roles.

– At the other end of the scale, retailers, health and charity organisations were the most likely sectors to have a larger proportion of women in higher paid roles. For example, the analysis reveals that the mean hourly pay gap for the charity sector is approximately 1.7 per cent.

– 87 per cent of companies disclosed a gender pay gap in favour of males.

– 71 per cent of companies disclosed a gender pay gap above 5 per cent.

– 48 per cent of companies disclosed a gender pay gap above the most recent national average of 11.3 per cent.

– 82 per cent of companies paying a bonus disclosed a bonus gap in favour of males. The mean hourly bonus gap is estimated to be 22.9 per cent, approximately 1.8 times the size of the reported mean hourly pay gap. This reflects the representation of males in senior roles, which, in turn, is linked to higher bonus payments.

– The analysis shows that the average reported proportion of females in the workforce is 45 per cent.

– The proportion of women to men tends to be lowest in the engineering, construction, manufacturing and technology sectors. Conversely, the healthcare and retail sectors have a much higher ratio of females to males.

Only the beginning

Notwithstanding the size of the gender pay gaps in companies or across sectors, the reporting legislation has achieved its objective of requiring companies to be more transparent about their gender pay gap and outline what they are doing to fix it.

With the first year of reporting behind them, some companies may feel that the biggest challenge of gender pay gap reporting has been dealt with. In fact, it is only starting. The December 2022 report is only the first step in a challenging journey to foster diversity and inclusion in our workplaces.

Businesses are required to file their 2023 gender pay gap reports in this month, based on their snapshot date from June. Smaller organisations with 150 or more employees will have to report from 2024 onwards. Organisations that wish to lead in this area must act now to ensure they are prepared for the future and use this reporting as an opportunity to recruit and retain the best and the brightest talent.

A number of companies have set specific targets for the representation of women in senior roles in their organisations. Meanwhile, others have committed to reviewing and improving policies in areas such as recruitment and parental leave policies or introducing new initiatives such as unconscious bias training.

This transparency is to be welcomed, as is the focus that many companies are putting on closing the gender pay and bonus gap. This will be a considerable challenge, particularly for those in sectors with large gaps. Progress will require a concerted effort that is enabled by HR, but led by business leaders, to make active changes to improve the representation of women in their businesses.

For those organisations embracing diversity, equity and inclusion (DE&I), gender pay gap reporting presents a positive opportunity to strengthen their brand by promoting their efforts publicly. For those that are yet to embrace the topic, it provides a chance to understand the reality in their organisation, why a gender pay gap exists and what is driving it. They can then begin to make data-informed decisions.