Small firms lead the way on closing gender pay gap

The gender pay gap in SME-dominated industries has fallen from 22% to 13% in the past decade - twice as fast as the national rate.

At the current rate, wage equality across these industries could be achieved by 2034, according to the findings of a new report by Informi, the business advice website from the Association of Accounting Technicians (AAT).

Just over two in five full-time workers (43%) in the UK are employed by an SME, while 57% work for a larger firm. Informi has studied 12 industries where at least 50% of employees work for small businesses.

While the national gender pay gap was at 21% ten years ago (and 22% in SME-dominated industries), these new findings show that current wage inequalities in SME-dominated sectors has fallen to 13%, compared to a national average of 17%. In addition, every industry dominated by small businesses has reported double-digit growth for female pay over the past decade.

The real estate sector has seen the greatest narrowing of the gender pay gap, with a 30% improvement in female pay compared to that of males; progress was least pronounced in construction, where the gender pay gap has only narrowed by 4%.

Darren Nicholls, product manager for Informi, said: "Small businesses are not shackled by tradition, legacy or bureaucracy in the same manner as many large companies can be. That said, clearly a double-digit gap is still far too high. There's a great deal more to be done, with some industries lagging behind others in implementing the necessary changes to ensure that females get just as many opportunities to thrive in their profession of choice.

"The fact that mandatory reporting has been brought in by the Government for larger companies should act as an encouragement for small businesses to consider female progression within their own firms, auditing their own internal data and acting upon their results."

Chloe Chambraud, gender equality director for Business in the Community, said: "Closing the gender pay gap is not just about equal pay, but about a much bigger organisational culture shift. Employers should understand any factors driving their pay gap, and address the root causes of inequality. This means reducing bias and increasing transparency in the recruitment, appraisal and promotion processes, normalise agile working and offer financially viable parental leave packages for all."

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