Business news

Northern Ireland falls in ranking on PwC’s Women in Work Index

Posted By:
PricewaterhouseCoopers Llp (PwC)

29th Feb 2024

Northern Ireland has fallen from first to fourth among the UK’s nations and regions for women’s employment outcomes, according to PwC’s annual Women in Work Index.

First launched in 2011, the Index is a weighted average of five indicators that reflect women’s labour market outcomes and assess progress made towards achieving gender equality at work. The OECD Index assesses the performance of 33 OECD countries including the UK as a whole, while the UK regional Index assesses the performance of the UK’s nations and regions.

The gender pay gap in Northern Ireland increased by 2.8% pts (from 4.7% in 2021 to 7.5% in 2022, versus 14.5% UK wide), but the region continues to have the lowest gender pay gap across all regions. The region also has a higher female full-time employment rate than most (the third best across the UK at 61%). However, its change in ranking this year was largely driven by a widening of 2.4% pts in participation rate gap (from 5.5% in 2021 to 7.9% in 2022), as Northern Ireland continues to have the lowest female labour force participation rate (69.7%) of all nations and regions in the UK (75% UK wide).

Cat McCusker, Regional Market Leader at PwC Northern Ireland, said:

“The regional Index shows the gap between men and women in the workplace is widening in NI, so it is important that policy makers and businesses work together to address this. This will not only help to address equity, but also help to alleviate labour and skill shortages in the region.

“There are numerous obstacles that women face – one significant factor is the absence of a comprehensive childcare strategy in Northern Ireland, which lags behind the rest of the UK. Immediate attention should be given to  the issues surrounding the cost of childcare so that women are not prevented  from participating in the workforce due to financial constraints. More broadly, it’s crucial that working parents are properly supported – championing flexible and hybrid working, alongside progressive parental leave policies, is key.

“These findings come at a time when policymakers and businesses are planning ways to accelerate economic growth here through continued focus on longer-term levers that will increase productivity and stimulate investment. Our priorities must be getting more people into work, and supporting skills and education in areas which will have the greatest, lasting impact.”

The report also found on average there was a 0.6 point increase in the regional Index score across the UK regions compared to 2021. Nine of the UK’s 12 nations and regions improved their Index scores on the UK regional Index compared with last year.

Scotland jumped from third place up to first as the top performing UK region, driven by greater female participation in the workforce. Conversely, the West Midlands was the worst performing region, falling two places from 10th. The East Midlands was also a poor performer and experienced the largest annual fall in the rankings, falling six places to 11th place. Yorkshire and the Humber and the North East recorded the largest improvement in the rankings in addition to Scotland, each rising by two places.

The Index: how the UK is faring

The Index shows the UK has slipped from 13th to 17th in the OECD Index ranking – the largest annual fall in rankings experienced by any OECD country this year. The UK’s gender pay gap increased from 14.3% in 2021 to 14.5% in 2022 and is higher than the OECD average of 13.5%, and higher than more than half the other 32 countries assessed on the Index.

Despite an increase in the UK’s OECD Index score by 1.1 points, reflecting small improvements on most indicators, its rank fell from 13th place to 17th place, demonstrating that the UK is being outperformed by other countries in terms of pace of progress made towards achieving gender equality at work.

Despite its poor performance, the UK remains the top performing G7 country. However, Canada is closing the gap and is now only one place behind. While the other G7 nations have remained fairly consistent in their ranking, nations such as Australia have seen dramatic improvements. Indeed, Australia recorded the biggest annual improvement in its rank of any OECD country, rising from 17th place in 2021 to 10th place in 2022.

The ‘gender pay penalty’ in the UK

The report finds that, even after accounting for a range of pay-determining factors, the pay disparity between women and men in the UK still persists with women earning almost a tenth less than men on average.

This ‘gender pay penalty’ worsens with age, with women between the ages of 46 and 65 experiencing more than twice the gender pay penalty than that of women between 16 and 30 years. Indeed, while a woman entering the workforce faces a pay penalty of around 5.2% on average, this widens to nearly 13% as her career unfolds. The report highlights the ‘motherhood penalty’, with women taking on an unequal share of childcare responsibilities, as a key driver. This is compounded by men often having more time available to perform so-called ‘greedy jobs’, which demand unpredictable and longer hours and tend to be more highly paid. In addition, women between 46 and 65 are also likely to be impacted by health conditions and the the menopause, which may require them to take more time off work, potentially affecting their career progression and compensation.

Addressing the gender pay penalty could unlock significant economic gains for the UK economy. If women no longer faced a gender pay penalty, the total increase in women’s earnings in the UK could be up to £55bn every year. Moreover, it could also encourage more women to join or rejoin the workforce – a 5% increase in the total number of women in employment could boost UK GDP by up to £125bn every year.