More than half of UK scaleups had a gender pay gap worse than the national average in 2020. Only one — energy provider Bulb — had no gap, new government data shows.
12 out of 20 reporting companies fell below the average UK pay gap of 15.5% for full and part-time employees — meaning women are paid 84.5p for every £1 men earn — some significantly. Compared with the nationwide pay gap for full-time employees of 7.4%, only Bulb and Ovo Energy were above the mark.
Following the extended deadline for reporting passing earlier this month, most UK scaleups with over 250 employees have submitted salary data for 2020 to the Office for National Statistics — showing a snapshot of April 4 of that year.
The figures represent the median wages for each gender and don’t mean a company pays women less than men for the same job — which is illegal. Instead, they point to the amount of women — or lack of — in senior and higher-paid positions at a company.
The filings highlight how much work there is to be done to fully close the gap, especially in fintech. The most recent pay gap data comes after calls for more transparency around pay, as well as reports that female-founded startups have been hit the hardest by Covid.
“One area which must be recognised is how the pandemic has disproportionately shifted the work-life balance negatively toward women... and the rate at which the gap is closing has dramatically reduced since Covid-19,” says Elspeth Garratt, production manager at women in tech community AccelerateHer.
“One of the most important ways to fight the gender pay gap is to create greater salary transparency,” she adds. “From job descriptions before applying, to promotions within organisations, salaries should be made more visible.”
There’s improvement, but still a way to go
Since reporting began in 2017, the national average pay gap has dropped three percentage points from 18.5%. While many UK scaleups have closed the gap quicker than that, they were among the worst offenders to begin with.
Fintech, a historically male-dominated sector, was reported to have a pay gap worse than investment banking in 2019. In 2017, Starling and Monzo respectively paid women 51p and 52p for every £1 they paid men.
Both have shown big signs of improvement since. They’re part of the government’s inclusivity initiative, the Women in Finance Charter, and have implemented a number of internal initiatives — which Sifted reported on earlier this year.
For its part, Monzo is one of a few UK scaleups to report its figures for 2021 early — companies have until April 4, 2022 to file — and has since reduced its pay gap to 4.3%.
Revolut had a significantly poorer showing this year — the first time it’s been required to report — and the $33bn fintech faced an internal backlash from staff over its handling of the figures.
Elsewhere in UK tech, the biggest improvement was seen at Babylon. The healthtech giant didn’t report its 2019 data — filing wasn’t mandatory last year due to disruption caused by Covid — but had a pay gap of 28.9% in 2018. It closed that gap to 14.7% in 2020.
Gousto and CMR Surgical also saw marked improvements, closing the gap by 13% and 11.5%.
Some scaleups, however, have gone in the other direction. Gymshark’s pay gap increased by 10% between 2019 and 2020. Deliveroo, which didn’t report last year, saw it's pay gap increase by 9.8% between 2018 and 2020.
Problems at the top
Despite company-wide initiatives at pretty much all of these scaleups to reduce the gap and elevate women to leadership roles, looking at pay quartile data shows just how uneven the landscape is at the top.
This serious lack of representation in decision-making roles plays a significant part in sustaining the gender pay gap, says Russ Shaw, founder of lobby group Tech London Advocates.
“Women are significantly underrepresented at all levels in the tech sector, but the problem is particularly acute in C-suite positions and among investors,” he says. “We need to see more initiatives such as Camden Council’s partnership with Google’s Career Certificates programme, where people receive the skills and training they need to secure high-quality employment in high-growth tech roles and be paid the wage they deserve.”
Who’s reporting for the first time?
Seven UK scaleups have crossed the 250+ employee threshold for reporting since it was last mandatory in 2019. Two of them — banking SaaS Thought Machine and cybersecurity company Darktrace — filed pay gaps that were smaller than the national average.
Fintechs dominate the lower end of the chart. All-in-one payment card provider Curve in particular stands out, with a pay gap more than triple the national average. It follows a trend of fintechs reporting a seismic gender pay gap at the first time of asking.
Although required to file this year, Octopus Energy has missed the October 5 deadline and is yet to report.
What about 2021?
Although UK startups have until April next year to file figures showing a snapshot of April 4, 2021, five scaleups have already reported — and they’ve all reduced their gender pay gaps from 2020.
GoCardless showed the biggest improvement — although it had much to improve on — shaving off a hefty 16.2% from its 2020 figures.
Babylon and Arrival were both above the national average for 2020, but whether they stay there when figures for 2021 are released next year remains to be seen.