Reduced gender pay gap linked to revenue growth

According to a new study, companies with public listings that have reduced their gender pay gap have experienced double-digit revenue increases.

The Chartered Management Institute and the FTSE Women Leaders Review examined gender pay gaps in FTSE 350 companies between 2019 and 2024.

Today (4 April), is the deadline by which eligible employers in the private sector must report their gender wage gap to the government. The deadline for public sector employers was 30 March.

Companies that have made the greatest strides to reduce their gender pay gap median hourly also experienced revenue growth.

Rightmove, for example, reduced its gender pay gap from 13 to 77% and had the highest revenue increase amongst those listed.

The online property portal increased the proportions of women in its board and executive positions by a combined 10 percentage points.

Kingfisher saw its gender pay gap improve by 14 percentage points and revenue increase by 13%, after increasing the number of female executives.

Smiths Group reduced its gender pay gap from 25 to 10 points. It also increased the number of women on their board and in its executive positions. The company’s revenue increased by 23%.

The CMI’s most recent survey revealed that, despite the apparent trend, 28% of British Managers believe that gender diversity has been overprioritised. This is up from 20% back in 2023.

Ann Francke is the CEO of CMI. She said: “Our research shows that top companies that are serious about gender balance thrive. It’s flat-out false to say that we have ‘gone too much’ with gender diversity.

The smartest companies are proving to the world that closing pay gap is not just fair, but it also fuels growth. The businesses that ignore the issue lose talent, credibility and competitive advantage.

Michelle Lydon said that diversity was “very important” to the business of Croda Chemicals, whose revenue increased 22%.

She said that it was important to focus efforts now more than ever on creating a culture of business that values and embraces differences.

This allows organisations to retain and attract the best talent, benefiting from the greatest minds in global workforces. It also drives innovation and, ultimately, delivers stronger business performance.

In addition, companies that fail to address the gender pay gap could lose out on talented employees. CMI’s study also revealed that nearly half a million British manager have said they refused to join an organisation because of its gender pay gap.

CMI has called on stronger accountability measures. These include requiring employers, as part of gender pay gap reporting, to publish action plans; extending reporting requirements to companies with 50 or more workers; and requiring employers to list salaries in their job advertisements.

The group also wants employers with 250 employees or more to be required to report on the pay gaps based on ethnicity and disabilities.

Some of these measures are being considered as part of the Employment Rights Bill.

Francke said: “FTSE 350 CEOs tell us that gender inequality is not just a moral matter–it is a business issue.

Companies that are focused on closing the gender pay gap see better performance, greater innovation and a competitive advantage. Neglecting gender parity costs businesses their talent, growth and market relevance.

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