1. UK Context & Regulations

Purpose

Guide UK employers through annual gender pay gap reporting and analysis, ensuring compliance and targeted action.

Audience

• CEOs & Board
• HR, Reward & Pay teams
• Legal & Compliance officers
• Diversity & Inclusion leads
• Payroll & Data analysts

Key Legal Requirements

• Equality Act 2010, s.78–83: Employers (≥250 staff) must publish annual mean & median pay gaps, bonus gaps, and quartile splits by 4 April each year, based on 5 April snapshot.
• Mandatory Reporting: Report on gov.uk and company website within 12 months of snapshot.
• Enforcement: Failure may lead to enforcement notices and reputational risk.

Voluntary & ESG Frameworks

• FTSE Women Leaders Review
• UN Women’s Empowerment Principles
• UK Corporate Governance Code (diversity expectations)

Why Conduct a GPG Analysis?

To identify pay imbalances, comply with statute, enhance employer brand, and meet investor/ stakeholder expectations.

2. Gap Calculation Methodology

1. Select Snapshot Date

Use 5 April (or earliest pay period covering that date) each year. Maintain consistency annually.

2. Data Collection

Extract from payroll/HRIS:

3. Data Cleaning

• Ensure pay rates converted to hourly FTE where needed.
• Exclude employees paid below National Minimum Wage.
• Validate SOC code assignments; group <5 individuals into “Other”.

4. Calculate Pay Gaps

Mean gap: (Mean male pay − Mean female pay) ÷ Mean male pay × 100
Median gap: (Median male pay − Median female pay) ÷ Median male pay × 100

5. Report Bonus Gaps & Quartiles

• Bonus gap: mean & median bonus pay differential.
• Quartile split: % women/men in each pay quartile (lowest to highest).

6. Test Common Drivers

• Unequal pay for identical roles
• Under-representation of women in senior grades
• Occupational segregation across SOC codes
• Part-time vs. full-time distribution
• Differences in bonus awards and promotions

3. SOC Occupational Classification

What Is SOC 2020?

The Standard Occupational Classification (SOC 2020) is maintained by the ONS, aligned with ISCO-08 for international benchmarking.

Structure

• 1-digit major groups (9 families): e.g. 1 – Managers; 2 – Professionals; 3 – Associate Professionals; … 9 – Elementary Occupations.
• 2-digit sub-major groups.
• 3-digit minor groups.
• 4-digit unit groups: detailed occupations (e.g. 2423 – Management Consultants).

Mapping to ISCO-08

• ONS provides a crosswalk of SOC to ISCO-08 unit groups.
• Mapping based on task/descriptors in both standards.
• Enables UK data to compare globally under ISCO framework.

Assignment & Validation

• Map each job title in your HRIS to a SOC 4-digit code.
• Audit assignments annually for consistency.
• Aggregate codes with <5 employees into “Other” to protect privacy.

Why Use SOC?

• Objectivity: Publicly documented, no proprietary scoring.
• Compliance: Required field in gender pay gap report template.
• Granularity: Drill from broad to detailed occupations.
• Comparability: Aligns with ONS labour statistics and global ISCO benchmarks.

Next Steps

• Embed SOC mapping in your HRIS and analytics.
• Run internal gap analyses by SOC + grade.
• Publish your statutory report on gov.uk by 4 April.
• Develop targeted actions to close gaps annually.

How the UK Uses SOC to Classify Occupations

1. Underlying Taxonomy: SOC 2020

The Standard Occupational Classification (SOC 2020) is maintained by the Office for National Statistics (ONS). It groups jobs based on tasks, skill levels and qualifications, providing a gender-neutral, standardized foundation for pay gap analysis.

• Major Groups (1-digit, 9 families): e.g. 1 – Managers, Directors & Senior Officials; 2 – Professional Occupations; 3 – Associate Professional & Technical; 4 – Administrative & Secretarial; 5 – Skilled Trades; 6 – Caring, Leisure & Other Service; 7 – Sales & Customer Service; 8 – Process, Plant & Machine Operatives; 9 – Elementary Occupations.
• Sub-Major Groups (2-digit): breaks each major group into 2–4 categories.
• Minor Groups (3-digit): more refined job families.
• Unit Groups (4-digit): detailed occupations, e.g. 2423 – Management Consultants & Business Analysts.

1.5. Connection to ISCO-08

To enable international benchmarking, the ONS provides a crosswalk mapping SOC 2020 unit groups to ISCO-08 unit groups:

• Mapping is based on alignment of task descriptions and qualification requirements.
• One-to-one mappings where possible; otherwise broader ISCO categories are used with notes on partial matches.
• This ensures UK pay gap data can be compared globally under the ISCO framework.

2. Legal & Reporting Cadence

Under the Equality Act 2010 (sections 78–83), UK employers with 250+ employees must:

• Use a 5 April snapshot each year.
• Publish mean & median pay gaps, bonus gaps, and quartile distributions by 4 April on gov.uk and their website.

3. Assignment Sources & Logic

Employer mapping: HRIS export or manual mapping of job titles to SOC 4-digit codes. ONS validation: checks for valid codes, minimum subgroup sizes (≥5 employees), and flags outliers. FTE conversion: pay rates converted to hourly Full-Time Equivalent as of snapshot date.

4. Why This Structure Works

• Objectivity: Publicly documented by ONS, no proprietary scoring.
• Comparability: Aligns with UK labour market data and global ISCO benchmarks.
• Granularity: Drill down from broad majors to detailed unit groups.
• Neutrality: Based solely on job content—tasks, skills, qualifications.

5. In Practice

1. Choose your snapshot date (5 April) each year.
2. Map each employee’s job title to a SOC 4-digit code in your HRIS.
3. Cross-reference each SOC code to its ISCO-08 equivalent for international comparability.
4. Prepare dataset (gender, SOC, ISCO, hourly pay, bonus, contract type).
5. Upload via gov.uk Gender Pay Service and publish report by 4 April.
6. Share findings internally and develop action plans to close identified gaps.