Pay gap reporting

At this rate, the ONS estimates it will take over 30 years to close the gender pay gap entirely. The data is a starting point, not a solution.

The gap is wider for all-employee data because a larger proportion of women work part-time, and part-time roles carry lower median hourly pay. For full-time employees the gap narrows to 6.9%. That is still a meaningful earnings disparity, and one that widens significantly at senior levels. In practice, this means part time employees often shape overall outcomes, even where core pay structures appear consistent.

We need to move beyond compliance to understand how we are tackling the causes of pay gaps across all demographics. That includes looking at average earnings, representation, career progression, and the experience of men and women across the workforce.

Senior pipelines and promotion practices are where the biggest gains can be made, and where Mercer's workforce analytics have the greatest impact. Pay gap reporting can reveal structural inequalities in the workforce, including occupational segregation and uneven progression into senior roles.

UK groups with EU operations (100+ EU employees) must report by 7 June 2027. Drives joint pay assessments where gaps exceed 5% without objective justification. The Directive increases focus on transparent pay data, objective pay criteria, and formal review where gaps exceed 5% without justification.

Candidates gain salary disclosure rights; employers must justify pay differences via objective, gender-neutral criteria, pushing UK firms to align to maintain competitive advantage.

Gaps must be explained or remediated, leading to increasing scrutiny of the story behind the numbers, not just the numbers themselves. Publishing pay gap data can improve transparency and trust, but it can also affect an organisation's reputation if the numbers are not supported by action. 

• Implement government-aligned data collection, automate snapshot capture, and track declaration rates across gender, ethnicity, and disability.
• Provide audit-ready calculations for all six required metrics, pay quartile reporting, and submission-ready outputs for the government portal.
• Experts in UK, Ireland, and EU legislation enable clients to fulfil their legal requirements with confidence.

This work often involves validating who counts as relevant employees, how to treat agency workers, and which elements of basic pay should be included when calculating hourly rates.

• Adjusted pay-equity modelling and intersectional analysis to understand the impact of each pay programme on your gaps and any potential risk areas.
• Root-cause diagnostics and sector benchmarking to identify where your gaps sit relative to peers.
• Our internal labour market map highlights the workforce drivers of pay gaps (hires, promotions, and terminations) so you can see which actions will have the biggest impact on diverse representation.

Understanding an organisation's gender pay gap means going beyond headline figures to assess workforce mix, progression patterns, working hours, and the concentration of female employees in lower-paid roles.

• Design targeted remediation including pay corrections, career progression frameworks, and reward strategy aligned to identified root causes, with measurable KPIs.
• Draft integrated Equality Action Plans linking diagnostic findings to specific interventions, ready for the mandatory 2027 requirements.
• Embed menopause policies, inclusive recruitment, and retention programmes into your broader EAP and inclusion strategy.
• Job architecture and levelling to address structural drivers of pay gaps across career bands.

Effective plans also help employers reduce exposure to equal pay claims by improving consistency, decision-making, and documentation.

• Narrative and disclosure support: craft clear, evidence-based communications for publicly published plans and employee audiences.
• Manager training and HR/payroll guidance on compliance, methodology, and conducting open conversations.
• Governance frameworks to establish ownership for reporting, set internal sign-off processes, and ensure calculations follow agreed definitions.
• Prepare for the formalisation of equality representatives under ERA 2025, which will increase union focus on employers’ equality initiatives.

Many employers now publish an accompanying narrative and a communications plan to explain results, manage employee expectations, and maintain confidence when reports go live.