What's Happening?
A significant number of organizations are now measuring their socio-economic pay gaps, reflecting a growing trend to address diversity, equity, and inclusion (DEI) challenges. According to the Social Mobility Foundation's 2025 Employer Index, 36 out of 140
entrants are currently measuring their class pay gap, a notable increase from just 10 last year. This move is seen as a response to political and social pressures, with businesses aiming to demonstrate their commitment to breaking down barriers to progression. The index ranks UK employers based on their efforts to open up opportunities to talent from all social backgrounds. Sarah Atkinson, CEO of the Social Mobility Foundation, highlights the importance of businesses getting ahead of legislation and responding to workforce expectations. She notes that while legal and professional services firms are leading the way, marketing organizations are lagging behind in addressing socio-economic pay gaps.
Why It's Important?
The increased focus on measuring socio-economic pay gaps is crucial for businesses to align with public and political expectations. As companies face pressure to demonstrate their commitment to DEI, measuring pay gaps can help identify disparities and drive change. This trend is particularly significant in a challenging political climate where many communities feel excluded from prosperity. By addressing these gaps, businesses can improve access to talent, foster diversity in thinking, and contribute to broader societal prosperity. Organizations that fail to address these issues risk falling out of step with public opinion and missing out on the benefits of a diverse workforce.
What's Next?
As more businesses begin to measure socio-economic pay gaps, there is potential for a broader shift in corporate culture and policy. Companies may face increased pressure to publish their findings and take actionable steps to address disparities. The Social Mobility Foundation is advocating for changes such as banning unpaid internships and increasing apprenticeships in deprived areas. While the government is not currently planning to mandate socio-economic pay gap reporting, businesses are encouraged to lead the way in responding to workforce and political pressures. This proactive approach could set a precedent for future legislation and drive meaningful change in the corporate sector.
Beyond the Headlines
The move towards measuring socio-economic pay gaps highlights deeper ethical and cultural dimensions within the business world. It underscores the need for companies to not only focus on financial performance but also consider their role in promoting social equity. This shift could lead to long-term changes in how businesses operate, with a greater emphasis on inclusivity and social responsibility. As organizations become more comfortable discussing socio-economic disparities, there is potential for a broader cultural shift towards recognizing and addressing systemic inequities.
