Female junior execs break down gender pay barrier

New figures released today by the Chartered Management Institute (CMI) show that female executives are earning as much as their male counterparts for the first time since its records began, albeit only at junior executive level. Earning an average salary of £21,969, female junior executives in the UK are currently being paid marginally more (£602) than male executives at the same level, whose average salary is £21,367.

However, the average figures across the whole sample of 34,158 UK executives surveyed by XpertHR on behalf of CMI suggest equal pay for male and female executives across all seniority levels remains a long way off. According to the 2011 National Management Salary Survey, men continue to be paid more on average than women doing the same jobs (£42,441 compared to £31,895), revealing a gender pay gap of £10,546.

This persistent gap means that, despite the fact that salaries for female executives as a whole are currently increasing faster than those of their male counterparts (female salaries increased by 2.4% during the 12 months between February 2010 to February 2011, a 0.3% higher rate of increase than for male salaries), if male and female salaries continued to increase at current rates, it would be 2109 – 98 years – before the average salary for female executives catches up with that of their male peers.

At £10,546, this year’s pay gap is slightly bigger than the gap of £10,031 which was revealed last year in the 2010 Salary Survey. In addition, salary increases for both male and female executives have fallen since last year‘s Survey – in the 2010 Survey male salaries were found to have risen by 2.3% and female salaries by 2.8%, whereas this year’s figures are 2.1% and 2.4% respectively. The difference between female and male pay rises has, therefore, narrowed year-on-year.  

Responding to the report, CMI’s Director of Policy and Research, Petra Wilton, said: “While CMI is delighted that junior female executives have caught up with males at the same level, this year’s Salary Survey demonstrates, yet again, that businesses are contributing to the persistent gender pay gap and alienating top female employees by continuing to pay men and women unequally. This kind of bad management is damaging UK businesses and must be addressed.

“It is the responsibility of every executive – both female and male, organisation and the Government to help bring about change. Diversity shouldn’t be seen as something that has to be accommodated, but something that must be celebrated. Imposing mandatory quotas and forcing organisations to reveal salaries is not the solution. We need the Government to scrutinise organisational pay, demand more transparency from companies on pay bandings and publicly expose organisations found guilty of fuelling the gender pay gap. They and employers must ensure that women are nurtured and supported at work, and can access development opportunities to help them on their way to senior management positions. We want to see mentoring and sponsorship programmes in more businesses and industries and more female executives pushing their employers to formalise and publicise equal pay and opportunity policies.”   

The research reveals that redundancy hit men and women equally hard between February 2010 and February 2011, with 2.2% of male executives and the same percentage of female executives losing their jobs. For female executives, this is an encouraging shift from last year when 3% of men were made redundant compared to 4.5% of women. The figures show women at more senior levels are being adversely affected by redundancy, however; at function head level, women are almost twice as likely as men to have been made redundant (2.7% of male function heads were made redundant compared to 4.9% of female function heads), while almost five times as many female directors as male directors lost their jobs (0.6% of men compared to 2.9% of women).

Resignation data shows more women than men are quitting their jobs (4.2% compared to 3.6%) and female executives are marginally more likely than men to transfer roles within the same company (3.4% compared to 3.3%).

Looking at the nations and regions, outside London (average female executive salary of £42,517) and the South East (£33,427), where female salaries are unsurprisingly highest, women should look to the South West (£31,247) and Scotland (£30,652) for the best pay packets. The gender pay gap is biggest in Northern Ireland (the average male executive salary is £13,793 more than that of female executives), followed by the Midlands (£11,346) and London (£11,129). Salaries are most equal in Wales where the pay gap is £2,441.

Phillippa Williamson, CMI Companion and Chief Executive of the Serious Fraud Office, comments: “As an employer, it’s frustrating that, at a time when things are still very tough for UK organisations, business leaders are missing a trick by not ensuring they pay their employees fairly. Companies that refuse to prove to talented women that they will be valued and rewarded as much as men won’t be able to recruit or retain the best employees and risk losing them to competitors. There is a clear business case for equal pay; evidence shows that companies where women are well represented at every organisational level from board level down perform better. Organisational performance will be improved by ensuring high quality managers and leaders are in place; gender shouldn’t come into it.” 

Sandra Pollock, National Chair of CMI’s Women in Management (WiM) network said: “There has been a lot of very welcome noise recently about getting more women into senior positions in UK organisations, for example Lord Davies’ report into women in boardrooms and the 30 Percent Club launching, so it’s disappointing to find that, at the current rate of increase it would be almost a century before men and women in executive jobs are paid equally. Why should a woman take on the responsibilities of a director-level position when the likelihood is still that she will be paid significantly less than the man sitting next to her at the boardroom table?

“Too often managers are male and aged 45 plus and we are fighting an ongoing war to ensure that professions attract people based on their talent and not their age or gender. True organisational diversity can’t be achieved until organisations pay men and women equally. The research launched today does, however, show that we have won our first battle – it is wonderful to see that the gender pay gap at junior executive level has closed and we hope this continues as this generation climb the ranks of management.”

To help female staff challenge inequality in their own workplaces, CMI is providing a range of free resources, available at www.managers.org.uk/glassceiling. The toolkit contains practical advice for women on topics including how to challenge unequal pay, skills development, returning to work after maternity leave and making the most of WiM’s networking opportunities, events, mentoring and support. The site also contains information to help employers offer better support to women workers and cultivate female talent.

 

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For further information, interviews and case studies, contact:

Harriet Fitzgerald/Lucy Dormandy  

Telephone: 0207 010 0828/0207 010 829

Email: harriet.fitzgerald@kindredagency.com / lucy.dormandy@kindredagency.com

 

NOTES TO EDITORS

 

  • The 2011 National Management Salary Survey was conducted on behalf of CMI by XpertHR between February 2010 and February 2011. Data was collected from 34,158 employees (14,805 male and 19,353 female) working in executive positions in UK organisations, through from junior executives to those at board level. The survey analyses salary and labour turnover data according to job role, region and certain industry sectors. For more information, contact Harriet or Lucy at Kindred on the details above.
  • CMI is the only chartered professional body dedicated to raising standards of management and leadership across all sectors of UK commerce and industry. CMI is the founder of the National Occupational Standards for Management and Leadership and sets the standards that others follow.
  • By setting minimum professional standards – built into our qualifications, membership criteria and learning resources – we recognise individual capability and give employers confidence in their managers’ performance.
  • As a membership organisation, CMI has also been providing forward-thinking advice and support to individuals and businesses, for more than 50 years. As the only organisation to offer qualifications from Level 2 (GCSE) to Level 8 (PhD), CMI is committed to equipping individuals with the skills and knowledge to be exceptional managers and leaders.
  • Qualifications and accreditations such as Chartered Manager, combined with products such as CMI’s Continuous Professional Development scheme and the online support resource, ManagementKnow, support the development of management and leadership excellence across the UK.
  • Through in-depth research and policy surveys of its 100,000 individual and 450 corporate members, CMI maintains its position as the premier authority on key management and leadership issues
  • XpertHR is the award-winning employment intelligence service for HR professionals. XpertHR Salary Surveys, powered by CELRE research, provide detailed pay data used by employers in reviewing and setting pay levels. The XpertHR Job Pricing tool was named both product development of the year and outstanding achievement of the year in the Data Publishers Association 2009 awards. Visit www.xperthr.co.uk for more information. The full survey costs £545 for participants and £1,090 for non-participants.

Comments

Hang on a minute here.  So if female managers earn more than their male counterparts, they are 'breaking down the gender pay barrier', yet if men earn more than women it is discrimination?  Give me a break!

This is an extremely bad report using data and statistics to drive a feminist agenda. They have not used all available information such as relative experience (have all these women worked exactly the same number of years - full time - as their male counterparts?), number of working age males vs. females unemployed (more difficult for males to get jobs due to positive discrimination towards females) and levels of tax breaks to women vs. single (and married) males meaning a number of working men are paying their tax to provide an advantage to women in work.

I believe in equal rights for all in the work place so fully expect a future CMI report on how wrong positive discrimination is for women when applying for jobs and the problems companies have when they promote men ahead of women for the right reasons but women complain due to sex discrimination.  Having managed many large sections with both male and female employees I can say that the women had an exceptionally larger period away from work than their male counterparts.  This was down to a number of things such as paternity leave (the males still refuse to take their allowance), child sickness, their illness and the inability to be able to due standard chores (banking etc) in their own time.

Sorry if this sound like a rant but I expect more from an organisation such as the CMI and feel let down when they publish poor one sided and incomplete reports such as this.  I will be reconsidering my membership when due.

 

I’m sorry you feel this way about the report, but please let me reassure you that the survey does focus on all relevant experience, as it collects data from chief executives through to trainee managers.  The sample, which exceeds 34,000 individuals, also deliberately compares like-with-like so that any comparisons made are done so with seniority, service, function and region taken into consideration.The survey also examines earnings and labour turnover, capturing information on why people resign.  The companies involved in the survey provide information for their organisation as a whole as well as demographic information for their individuals. As it is a rolling survey that has been conducted for 38 years, the data is also collected in trend format so that organisations can see what progress, if any, is being made over time.  There have been incidences in the past in which men have not done as well as women in some aspects of the survey and CMI has highlighted these, as appropriate.  It is also worth noting that the data is collected by an external research house, ensuring it is anonymised, validated and audited to ensure its accuracy prior to analysis.Focusing on the gender pay gap is an important aspect of CMI’s work because, as the professional body for managers, it is our duty to highlight inequalities, especially where these are regarded as coming from poor management practices.  Ours is an equality agenda and we are committed to supporting the needs of managers regardless of gender.  That’s why we make it clear across our communications that the figures are based on average numbers across a sample of 34,158 UK executives and we are confident that the figures and trends we have highlighted are representative and accurate due to the significant sample size behind the story.As part of our efforts to fight for equality for all we have made submissions to Government on the modern workplace, released reports that focus on issues including diversity in the workplace and provided advice and guidance on how to deal with discrimination (in its various forms) to both employers and individuals. I do hope this shows we take your views seriously and that you can be confident that our views are based on robust data with the issue of tackling inequality being at the forefront of our minds.

Obviously the headline figure is very startling, but I'd want to know a whole lot more about this issue.  It would be great to know more about how the numbers were compiled.  Are we comparing like with like here?

Also, why does CMI believe this disparity to be the case?  I mean rationally speaking, if I was a business and could feasibly hire smart people for less money, one would think organisations would be full of women in top positions.  That this isn't the case suggests that something else is afoot.

That women earn more than men at a young age does suggest that childbirth does play a factor, although suggesting as much seems to be the elephant in the room in this debate.

There is a heap of research out there into employee engagement/motivation, with nearly all of it saying money is not a major factor.  Many recently have suggested that better work/life balance is more important than money.

So whilst the research poses some questions, it isn't really clear if there really is a gap in income because of the lack of any detail in how the numbers were derived, and sadly there's little input in the so what column.  So assuming these figures are correct, what does CMI propose companies do?

Looks like we posted at the same time Mike.  Is it possible to view the raw data?  The government website on pay doesn't have anything on gender so it would seem a good opportunity to fill in the 'missing link'.

Whilst perhaps unrealistic, wouldn't it also be nice if some of those companies that were paying less were named and shamed.

Here is a quote from www.statistics.gov.uk:

"Although mean and median hourly rates provide useful comparisons between the earnings of men and women, they do not necessarily indicate differences in rates of pay for comparable jobs. Pay averages are affected by the different work patterns of men and women, such as the proportions in different occupations, their length of time in jobs, and whether they work full-time or part-time."   Presumably the same applies to executive salaries.

So when you say "men continue to be paid more on average than women doing the same jobs (£42,441 compared to £31,895), revealing a gender pay gap of £10,546"  - how do you know they are doing the same jobs? They may be working in different industries or sectors, for different companies. There is surely a great difference between the situation of a single employer paying men more than they pay women, and a situation where a sector which employs mostly men also pays very high salaries (e.g. investment banking). The latter could easily distort the figures.

I would be interested in your response to this, particularly if you could cite examples of the same employer paying women lower salaries for doing the same jobs as men.

Nick Higgins

Hi Wayne

The data is comparing like-with-like - so female team leaders in the retail industry are, for example, compared to male team leaders in the same sector.

The disparity is largely historical because when the survey first began 38 years ago there were fewer women in the workforce and so their average salary would have been a whole lot less than the average salary for men.  As the proportion fo women in the workforce has grown so the gap has narrowed but there have always been industry sectors or geographical regions which fall behind the trend, so affecting the national average.

The reason for the closure of the pay gap at junior exec level is less to do with childbirth though and more to do with the fact that 41 years after the first sec discrimination legislation was enacted, organisations are realising that it is the job that counts and the skills that are needed for that job which matter - rather than the gender of the job holder.

You are right, too, that there is considerable research suggesting that money is not the main motivator.  It's certainly something CMI has discovered in its own research.  However, where remuneration is the key issue under exploration, where therte are inequalities motivation is an issue.  We know this because the figures suggest more women are inclined to resign than men, if they feel unfairly treated.  It's a huge loss to the 'corporate world' in terms of the talent and skills that will walk out the door.

Many people are asking if it's the Government's responsibility to act and CMI is saying that legisation is not the answer.  In fact, if you look at voluntary responses to the Davies Report in the past 6 months 18 FTSE 100 companies have reacted to his calls for an increase in female representation at Board level by appointing female directors.  It's a slow start, but it's a start.  That's why we are urging employers to act and bring about equality, before they are forced to do so - it means instilling a culture of equality which can't be imposed by law and working with professionakl bodies who already have codes of conduct giving advice on how to act.

Hi Nick

The survey calculates everything from movement in salaries to earning power and labour turnover based on a constant sample of matched individuals.  This matched sample is based soley on those individuals currently performing at the same responsibility level, in the same job function as they were 12 months ago in companies which took part in the previous – and this year’s – surveys.  This means that where we have companies who were in last year’s survey and remain in this year’s they only include data of the staff that have remained in post – new arrivals, for example, will only be included in next year’s report.

"The disparity is largely historical because when the survey first began 38 years ago there were fewer women in the workforce and so their average salary would have been a whole lot less than the average salary for men.  As the proportion of women in the workforce has grown so the gap has narrowed but there have always been industry sectors or geographical regions which fall behind the trend, so affecting the national average."

In light of this, there is one statement that bothers me: That if the gap continued to close at current rates then it would be another 98 years until a state of equal pay were reached.

I very much doubt that the gap has been closing at a constant rate over the past 38 years, let alone the last 98, so it would appear highly flawed to take the current rate to extrapolate when the gap could feasibly be closed.

If the rate at which the pay gap has been decreasing has been increasing with time, then surely it will be much less than 98 years before the gap is closed.  Or is there a "terminal velocity" to such phenomena?

I am not against the pay gap closing in any way, just against statistics which potentially raise more questions than they answer.

Having completed a dissertation on social attitudes I am aware that it is quite often a change in law that acts as a catalyst to a shift in social attitudes - albeit with a slight time lag.  It would be interesting to know whether anti-discrimination legislation has historically led to an increase in the rate at which the pay gap has been closing or whether the rate remained constant.