Ireland sees a 1.4% improvement in the mean gender pay gap
December 2023 saw the second annual deadline for companies employing over 250 people to disclose their gender pay gaps under the Gender Pay Gap Information Act 2021. To date, figures have been disclosed by over 550 companies.
This compares to Ireland’s latest available national gender pay gap of 9.6% (2022) according to the CSO, and an EU average gender pay gap of 12.7% (2021) based on Eurostat data.
Navigating the gender pay gap landscape
At its core, the gender pay gap refers to the average disparity in hourly wages between men and women within an organisation. Importantly, this gap does not imply a lack of equal pay for equal work, which is legally mandated in Ireland. Rather, it often underscores that women disproportionately occupy more lower-paid roles than men.
In this year’s data, the gender pay gap widens in favour of males across the lower middle quartile, upper middle quartile and upper quartile, with females representing 47.1%, 45.2% and 39.8% respectively. See Graph 1.
According to the data published in December 2023, the most pronounced gender pay disparities continue to be observed in:
- the legal profession (35.1%);
- the aviation sector (33.5%);
- the insurance (22.9%) and banking (18.9%) sectors; and
- the construction sector (21.0%)
Retail, administration, government/health and charities continue to report single-digit pay gaps with minor movements between 2022 and 2023.
While aviation continues to have a significant pay gap, it has experienced the largest decrease (-4%) when compared to 2022, closely followed by the manufacturing sector (-3.2%) and transport/storage (-1.8%).
Contrary to these improvements, increases have been recorded in the legal profession (+6.0%), the entertainment and recreation sector (+3.0%) and utilities (+2.5%).
It is a key reminder that focus and momentum are needed to continuously evaluate the organisational strategy in addressing the gender pay gap and refine measures to enact and sustain meaningful change.
Proportion of Males and Females in each Quartile
Workforce participation
Workforce participation plays a significant role in shaping the gender pay gap, reflecting broader societal and organisational dynamics. Understanding the relationship between workforce participation and the gender pay gap is essential for developing effective strategies to promote pay equity and address disparities in compensation.
In industries like engineering, construction and technology, there continues to be a pronounced gender disparity, with fewer females occupying roles within these sectors. For example, average female participation across companies in the construction and engineering sector that reported their pay gap numbers in December 2023 stands at 24.0%, with most of these in the lower and lower middle quartile. See Graph 2.
On the other hand, the healthcare and retail sectors experience a contrasting pattern, with a notably higher representation of females than males—retail reports an average of 50.8% female participation, with healthcare at 69.5%.
Construction and Engineering - Proportion of Males and Females in each Quartile
Playing the longer game
While progress in closing the gender pay gap across several industries may seem slow across 2022 and 2023, it is worth noting that some of the most effective strategies for implementing a sustainable approach to closing the gender pay gap can take time.
For example, some organisations seeking to achieve long-term, sustainable gender diversity may already be advanced in hiring more female employees at junior levels, with a view to nurturing those individuals as they climb the ladder to more senior, higher-paid roles. However, hiring more relatively low-paid women while there’s little change at the higher-paid senior levels will make the mean gender pay gap wider in the short-term.
In the long run, however, if that female talent can be retained and developed, the gap will narrow, and the organisation will be better balanced at every level.
Change at the top
Although recruiting more junior women can be an important part of the long-term solution, issues must be addressed at all levels of seniority.
While female representation at the very top of an organisation is critical to influencing culture and providing role models for the rest of the workforce, it’s also important not to underestimate the importance of creating gender balance across the entire top quartile. These individuals represent the pipeline of future leaders and have the ability to power sustainable change across all levels of an organisation.
The mandatory reporting of disclosures on pay quartiles is the key to understanding the representation of males and females in the workforce. 75% of companies analysed in our data set demonstrate a greater relative concentration of males in the ‘highest-paid’ quartile. While this represents a decrease from our findings last year, it underscores the ongoing need for further progress in addressing gender disparities in pay.
The representation disparity is further evident in the figures pertaining to bonus gaps. The mean bonus gap reflects the difference in the monetary value of bonuses earned by males and females.
The mean bonus gap across the companies we analysed was 23.0% (22.9% in 2022) even though for most industries, the percentage of males and females receiving a bonus was broadly even at 66%. As such, the mean bonus gap emphasises the overrepresentation of males in senior positions, which typically correlates with higher bonus payments.
While this is an interesting statistic, bonuses only tell part of the story. The discretionary nature of bonuses means they are ‘reset’ each year, making them difficult to rely on as an accurate gauge or trajectory.
Percentage of males and females receiving bonus by industry/sector
Demonstrating progress
Gender pay gaps are based on a snapshot of data taken in June of the year before the reporting deadline.
Many businesses that published their pay gaps in December 2022 did so in the weeks leading up to the calendar year-end deadline, meaning they may not have been aware of the full extent of their gap until then.
The 2023 reports are based on data from June 2023, at which point some companies may have just started to react to their first set of figures.
While this may be understandable when the requirements are new and companies are getting to grips with them, this excuse is unlikely to age well.
Having now had at least one full year to put measures in place to improve any gender pay gaps, pressure will be on organisations with 250 or more employees to present evidence in December 2024 that demonstrates the efforts they are making to effect change. This may include reviewing and amending people policies and processes from recruitment to retention, returners and promotions.
2024 also marks the first year in which companies with 150 or more employees will fall within the mandatory reporting requirements, which will bring new and interesting dynamics to the analysis.
Another important point is that both CSRD and the EU Pay Transparency Directive will require in-scope companies to report on their gender pay gaps. The EU Pay Transparency Directive will require details by ‘category of worker’. Employers will also be required to conduct a joint pay assessment (essentially an equal pay audit) with employee representatives if the reporting identifies a gender pay gap of at least 5% in any category of worker that is not justified by objective and gender-neutral factors or remedied within six months.
Using our 2023 data set as a guide, this could see 67% of companies required to do further work to justify their pay gap or engage in an equal pay audit where a gap of more than 5% is identified for any category of worker.
Percentage of companies with a mean pay gap in excess of 5%
Key Actions Businesses can take today
1. Accountability and leadership commitment
Leaders play a crucial role in fostering and maintaining a culture of inclusion where all employees feel valued, respected and empowered to succeed. Holding leaders and managers accountable for promoting and advocating for gender equity and closing the gender pay gap is essential for driving meaningful change. Leadership sponsorship and commitment to gender diversity, equity and inclusion initiatives, including setting clear goals and targets for reducing pay disparities, is crucial for sustained progress in this area.
2. It’s not a ‘one size fits all’ issue
Gender pay gaps are often created by a complex combination of factors, including promotion rates, allocation of performance ratings, access to the best opportunities to progress and recruitment pools. In some organisations, a flexible working policy may, for example, be a key factor in driving significant change. But elsewhere, changes to recruitment processes or talent identification may have a more pronounced effect. It’s critical to understand the nature and origin of the problem and not jump to convenient conclusions or make generalisations for the sake of ease. Ultimately, the starting point should be an organisation’s own data and experience—not the initiatives and approaches of others.
3. Ongoing evaluation and adjustment
This is crucial in sustaining the progress made in closing the gap. Organisations must continuously monitor and evaluate the effectiveness of initiatives and adjust strategies as needed. Best practice involves regularly reviewing compensation practices, assessing the impact of interventions and soliciting employee feedback to ensure that efforts to close the gender pay gap are making meaningful progress. This is an ever-evolving, ever-changing issue, demanding solutions that adapt and evolve in tandem.
4. Driving impact in DE&I by elevating organisational culture
Implementing robust diversity, equity and inclusion initiatives that address unconscious bias, challenge stereotypes, create opportunities for career advancement, provide training and education and promote diversity in leadership roles will create a more equitable and inclusive workplace where all employees can thrive and feel a sense of belonging. However, genuine and lasting change will be powered by the behaviours and actions of those within the organisation.
We are here to help you
With broader ESG reporting obligations fast approaching in the context of CSRD and the EU Pay Transparency Directive, organisations must do everything they can to combat the gender pay gap. This will help them retain and attract talent and protect their reputations while enhancing productivity and performance. Whatever approach businesses take, it should be treated as a vital component of running a responsible, transparent business that is fit for the future.
Meet our Pay Governance team
Navigating change, together.
Contact us
