Most female managers would have to work up to 80 to get equal pay
19 August 2014 -
Gender pay gap means that female bosses would have to toil all the way through their 70s to earn as much money as men before they retire, CMI research reveals
A female manager would have to work for at least 14 years beyond her pensionable age of 65 to earn the same amount of money as a male counterpart – highlighting the “mid-life pay crisis” suffered by millions of working women. According to the latest annual data from the Chartered Management Institute (CMI) and salary specialists XpertHR, women aged 40 and over are earning 35% less money than men, with the average wage gap between men and women in the 45-to-60 age bracket coming to £16,680 per year.
The figures are based upon CMI’s National Management Salary Survey, which covers more than 68,000 UK professionals and highlights a startling chasm between the fortunes of male and female managers. Indeed, the latter are hit the hardest during the second half of their working lives.
If an all-ages average is taken into account, the average male salary is still £9,069 greater than the annual female takings of £39,461: a 23% difference. For women over 40, though, the naturally higher salary and rank is deflated by a glaring gap in bonus pay. The average bonus for a female director, for example, stands at £41,956, while a man in a similar role receives £53,010. As such, the growing gender disparity is most prominently on show at senior levels, with male directors’ basic salaries increasing by 2.7% compared to 1.9% for women. When bonus payments are added to basic pay, male directors take home £204,373 – compared to £171,945 for women.
Reasons for optimism, however, emerge lower down the career ladder. In three of the five most-junior job levels, annual female pay rises are reportedly surpassing those of men (2.4% compared to 2.3%). And while younger women in higher roles do still face significant gaps – 6% for those between 20 and 25, and 8% for those between 26 and 35 – they are much narrower than they are in senior categories.
According to CMI chief executive Ann Francke, the findings provide a strong reminder of the discrimination that women endure in the workplace. “Lower levels of pay for women managers cannot be justified,” she said, “yet our extensive data shows the pay gap persists, with many women hit by a ‘mid-life pay crisis’. Women and men should be paid on the basis of their performance in their particular roles – but this is clearly not yet the case for far too many. It’s not right that women would have to work until almost 80 for the same pay rewards as men. We have to stamp out cultures that excuse this as the result of time out for motherhood, and tackle gender bias in pay policies that put too much emphasis on time served.”
Further gender disparities can be found in other areas of the workplace. While the study revealed that, for the first time since 2006, more men have been made redundant than women (1.1% compared to 0.8%), the data suggested that employer career progression structures are still failing women. This is partly demonstrated by the fact that 69% of entry-level vacancies are filled by women, compared to just 30% of available director roles.
XpertHR head of salary surveys Mark Crail believes that organisations are giving up too easily on women who have taken a break from work to start a family. “The data shows that women begin to fall behind at the age when they are most likely to be starting a family,” he said, “and it just gets worse from then on. It appears that employers often give up on women in mid-career, and are missing out on a huge pool of untapped knowledge, experience and talent.”
Based on the research, there are three steps that employers can implement to plug these gender gaps:
1. Champion diversity in the talent pipeline at all levels
Set targets to benchmark achievement, in terms of equal pay and promotion.
2. Actively encourage parents, carers or others to return to work after career breaks
This would help organisations to retain their best people – regardless of age, gender or family situation.
3. Position key senior leaders as role models on these issues
Women should share their achievements by mentoring other women, in order to give them the confidence, training and skills they need to flourish in top management roles. By seeing other women – of all ages – in positions of influence, female managers will believe this is possible. For men, there is just as important a role to play in sponsoring or developing female managers in their company or sector.
Francke concluded: “With the economy looking healthier than ever, it’s the perfect time for employers to expand their talent pool by supporting more women to become senior managers and leaders. CMI is calling for employers to measure and report on the percentage of women at each level of management and what they are paid, which leading employers are increasingly doing.”
Download an infographic of the key findings.
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