Trade unions warn that the gender pay gap may take 30 years to close

While gender equality in the workplace has made some progress, we still have a long way to go. Research from the Trades Union Congress (TUC) recently found that the gender pay gap across the UK is, unfortunately, still alive and kicking.

It currently stands at 12.8%, which is equivalent to £2,548 per year. According to the TUC, at the current rate of progress, the gap will take another 30 years to close, meaning a larger push may be required to address this inequality. 

While only employers with more than 250 staff are legally required to publish gender pay gap data, businesses of all sizes should pay attention. Pay equity increasingly affects employee satisfaction, retention, and reputation. 

What is the gender pay gap — and why does it still exist?

The gender pay gap measures the difference in average hourly earnings between men and women across an organisation or sector. 

While sometimes the case, it doesn’t always literally imply that women are being paid less than men for doing the same job. 

More broadly, the gap often reflects structural patterns in how work and role progression are experienced across genders. And understanding that the gender pay gap is a deeper-rooted issue than just an unequal hourly rate is crucial for actively changing the systems that perpetuate it.

For example, women are statistically more likely to work part-time, often due to childcare or caring responsibilities. As of 2025, 36% of women in the UK worked part-time, compared with 14% of men. 

They are also more likely to take career breaks, which can slow progression, meaning fewer women secure senior, higher-paid roles.

Why the gender pay gap matters for small businesses

Currently, only businesses with teams larger than 250 are required to publish gender pay data. But just because smaller companies aren’t legally required to report on it, they aren’t immune to the effects. 

Beyond it simply being unfair, pay inequity has an impact on retention and morale. In smaller teams, a lack of transparency or perceived inequality relating to pay can quickly erode trust throughout the business.

Similarly, as younger workers populate the workforce, values are increasingly changing to champion transparency and equality. In competitive labour markets, loudly prioritising equitable pay structures can strengthen your reputation and attract top talent.

Practical steps SMEs can take to narrow the gap

The first step is to review your workforce to see where gender imbalances sit and identify patterns.

Are women concentrated in lower-paid roles? Are they underrepresented at senior levels? Then take a look at progression: compare who applies for promotion, who reaches assessment stages, and who ultimately secures the role. 

At the recruitment level, by analysing your applicant pools and hiring outcomes, you can determine how likely women are to be hired into higher-paid roles at your company. 

Pay structures should also be regularly reviewed, even if it’s an informal annual check-in. Look at starting salaries, bonuses, overtime, and performance scores for men and women in comparable roles. 

A heavy reliance on pay negotiation can unintentionally disadvantage women, so introducing clear, transparent salary bands and making it clear when pay is negotiable can level the playing field.

Finally, consider whether part-time employees and those with caring responsibilities are well-supported. If flexible working is only available in theory, or just for junior positions, disparities will inevitably continue. Therefore, make it easier for employees at all levels to balance work and caring responsibilities with adequate parental leave and return-to-work pathways.