The glass pyramid exposed: what all managers should know about the gender pay gap

05 April 2018 -

PAY REPORTS HIGHLIGHT ‘GLASS PYRAMID,’ WITH MORE WOMEN THAN MEN IN LOWER PAID ROLES AND FAR FEWER IN HIGHER PAID LEADERSHIP ROLES

With more than 1,000 firms reporting their stats moments before the 4 April deadline, the final Gender Pay reporting data shows the UK’s mean gender pay gap (GPG) is 15%.

More than 10,000 of the UK’s biggest companies with more than 250 staff submitted their data on how much they pay their male and female employees for the first time, as required by law. The results show there are currently 8,745 companies that have gender (mean) pay gap and thus in favour of men.

HOW THE GENDER PAY GAP IS CALCULATED

The gender pay gap is calculated by subtracting the difference between the average male pay and the average female pay. The mean gender pay gap is most significant because it can be affected by the lack of representation of women in the top two pay quartiles.

The findings strongly suggest the presence of the ‘Glass Pyramid’, with the mean gender pay gap reflecting the overrepresentation of men in the top and upper middle pay quartiles in most organisations.

MORE MEN AT THE TOP

Although the ratio of men to women in the lowest job roles in their respective companies is relatively equal (46% vs 54%), the data shows that the proportion of women falls in more senior positions. In the top decision-making positions, for example, men hold 61% of the jobs compared to just 39% of women.

With the largest gender pay gaps present in organisations with the lowest ratio of women compared to men in the top leadership jobs, the data validates the Chartered Management Institute’s campaign to encourage the promotion and training of more women into management.

This pattern is also supported by CMI/XpertHR’s gender pay gap 2017 analysis of the “Glass Pyramid” effect for managers. This research also concluded that women are overrepresented in junior roles (66%, compared to just 34% of men in those positions) and are severely underrepresented in executive jobs with just 26% being women.

Petra Wilton, director of strategy for the Chartered Management Institute, said:  “Companies that have met the deadline for reporting their gender pay gap have taken an important first step in acknowledging the scale of the issue. We now call on these thousands of employers to focus on the actions they need to take to close the gap.

“We know that gender-balanced companies outperform their peers, and McKinsey research shows that equal gender representation would generate £150bn a year for the UK economy by 2025. So it’s disappointing to see that only 8% of companies have reported equal gender pay and 78% of companies pay their men more than they pay their women.

IS THERE PROGRESS?

“Employers need to ensure that tackling gender inequality is a long-term business priority – not something that can be swept under the rug. This is a wake-up call that far more needs to be done to rid business of longstanding discriminatory cultures holding back the recruitment, promotion and retention of talented women.”

GENDER PAY GAPS CAN BE 50 PER CENT OR GREATER

Shockingly, more than 352 companies reported a gender mean pay gap of more than 40%, and of those, 130 firms admitted a mean gender pay gap over 50%, meaning these organisations could be paying men more than double that of women.

SECTOR INEQUALITIES

Financial services and insurance employers are the guiltiest of significant gender pay disparities according to the data, with the sector reporting the worst mean gender pay gap of (26.1%).

The average pay gap attributed to bonuses (BPG) - including year-end bonuses, profit share payments, performance incentives, and commissions – was polarised depending on the method of measure. The average mean bonus pay gap was 15% whilst the average median bonus pay gap is -14%, showing women were on average paid more than their male peers.

In every sector except education, utilities and agriculture, the data shows men were awarded larger bonuses on average than women. The financial services and insurance sector was once again the worst in this regard with a mean average pay gap of 46.1% and a median of 39.9%. This includes bonus pay gaps of 86% and 78.7% at HSBC Bank and Barclays Bank Plc respectively.

We must push for change.

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