The UK’s gender pay gap reporting deadline quietly came and went on 4 April this year, requiring all private sector organisations with more than 250 employees to disclose their pay disparities.

The latest figures show 78% of reporting companies still pay men more than women on average for exactly the same work; a sobering stat made worse by a growing rollback in diversity, equity, and inclusion (DEI) commitments, particularly across the tech and startup world.

It’s a worrying state of play to still be seeing in 2025 and, as Shirine Khoury-Haq, CEO of Co-Op – the UK’s first big retailer to employ a female CEO, CFO and chair – said recently, “The speed at which some [businesses are scaling back diversity policies] makes you wonder if they ever truly meant it.”

But set aside, for a moment, the persistent gap and fading DEI promises, and a bigger question emerges: should smaller companies – startups and scaleups that aren’t legally required to report – be taking pay inequality more seriously too?

Why pay parity should be on every company’s radar

 Perhaps because the UK law doesn’t yet require it, or because of an assumption that smaller firms are somehow exempt from the problem, many startups still treat the gender pay gap as someone else’s issue. But that thinking isn’t only outdated, it’s short-sighted.

The reality is that monitoring and addressing pay parity early on isn’t just “fair”, it actually offers a clear business advantage.

Fair pay boosts retention, reduces recruitment costs and builds a stronger employer brand. It also supports a healthier workplace culture; one where staff are more likely to feel valued, heard and motivated. In other words, it’s good for productivity. And there’s clear evidence to back that up. McKinsey, for example, has consistently found that companies with more diverse leadership are more profitable – with one report showing firms in the top quartile for gender diversity on executive teams were 25% more likely to outperform their peers financially. Similarly, recent research from the universities of Glasgow and Leicester showed companies whose boards consist of more than 30% women  are more likely to outperform organisations with a lower gender balance.

For fast-growing companies still in their early stages, embedding pay parity from the very start also lays the groundwork for a fairer workplace. It’s not only easier that way, but also far less costly to get it right early doors than to correct gaps later down the line as they scale.

What smaller companies can measure now

With the above in mind, what can and should be done now?

For many, the obvious start is to look at your company’s basic numbers; analysing the headline gender pay gap figures and comparing with the national average. However, these basic numbers often miss the nuances that really matter and can even skew the conversation. And this is why I always recommend looking beyond them. Factors like job roles, career stages, working patterns (part-time vs full-time), and levels of experience all influence how fairly people are paid, and ensure pay decisions are rooted in fairness and transparency as they grow. Looking at raw data alone, companies risk misreading the data, or worse yet, assuming there’s no problem to solve.

What’s needed is a level of explanation along with that data. I find France – where I also work – does this really well. There, companies with 50 or more employees are required to publish a detailed gender equality index – covering pay gaps around people’s years of experience and age, increases in gaps – or not – when people come back from maternity, and also the number of women in the highest 10%–paid jobs. It’s less of a tick box exercise and more about honestly acknowledging where you are, and where progress is being made, or indeed not. For me, this more structured and transparent approach helps keep the issue front of mind, bringing the conversation forwards – and any businesses scoring too low must take action.

I’d advise any firm in the UK – regardless of size – to apply a similar mindset. Pick some extra metrics, but not too many otherwise you have too many messages, and take it from there. Useful areas to monitor might include:

• Average pay by job function and seniority
• Pay differences between full-time and part-time employees
• Gender representation at different career stages
• How salaries change after maternity leave or career breaks
• The gender split across the highest-paid roles

Finally, it’s not enough just to have the numbers, you must also use them to understand what’s working, where the gaps are, and where efforts should be focused. At PayFit, for example, we know we have equal numbers of male and female managers, but in tech roles we have fewer women, and these are less senior. Knowing this is one thing, but it’s delving into it and actually being compelled to take action that truly matters.

For me, fair pay isn’t about beating a national average or something to be used to push PR. It’s about building better businesses, where opportunity is open to everyone.

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