Women hit by £400,000 gender pay gap over course of careers

New figures released today reveal that the average female executive suffers a lifetime earnings gap of £423,390 when compared to a male worker with an identical career path. With the current gap between male and female average pay at management level standing at £10,060 a year, a woman and a man entering executive roles aged 25 and working their way up the career ladder until retiring aged 60 would take home pre-tax totals of £1,092,940 and £1,516,330 respectively, based on today’s levels. 

The figure is based on analysis by the Chartered Management Institute (CMI) of market pay data collected by salary survey specialists XpertHR, which looks at salary and labour turnover data for 38,843 people in executive roles in the UK. The research reveals that the average male in an executive role earned a basic salary of £40,325 over the 12 months to August 2012, compared to £30,265 for a female in the same type of role. Although female junior executives earn marginally more (£363) than males at junior levels for the second year running (£21,491 compared to £21,128), the gender pay gap remains substantial at the opposite end of the executive career ladder, with female directors earning an average basic salary of £127,257 – £14,689 less than the male director average of £141,946.

This year’s survey also reveals that the gender pay gap extends to annual rewards. At the 91 participating employers providing data on the payment of bonuses, women receive less than half what men are awarded in monetary terms – the average bonus for a male executive was £7,496, compared to £3,726 for a female executive. This picture gets worse as women and men progress in their careers with 50% of males at director level receiving bonuses compared to 36% of females. At £65,000, the average bonus paid to a male director was £7,000 more than that awarded to a female director.


News on the nature of the ‘management pipeline’ is also mixed. The figures show that the percentage of women in the executive workforce now stands at 57%. However, while at junior level the majority (69%) of executive workers are now female, a much smaller percentage have made it into top roles – just 40% of department heads are female and only one in four chief executives (24%).


Ann Francke, CMI Chief Executive, said: “A lot of businesses have been focused on getting more women on boards but we’ve still got a lot to do on equal pay and equal representation in top executive roles. Women make up almost three out of four at the bottom of the ladder but only one out of four at the top.  This lack of a strong talent pipeline has to change, and fast.  Allowing these types of gender inequalities to continue is precisely the kind of bad management that we need to stamp out. Companies are missing out on the full range of management potential at a time when we need to be doing everything we can to boost economic growth.”


The labour turnover data also shows that more women than men fell foul of job cuts in the 12 month period between August 2011 and August 2012 – 4.3% of female executives were made redundant, compared to 3.2% of male executives. This difference grows as women move up the ranks – twice as many female directors were made redundant compared to male directors (7.4% compared to 3.1%). The number of women losing their jobs has almost doubled since the last survey from 2.2% in 2011. In contrast, more men than women left their jobs of their own volition – 14.2% of men walked away from positions in the 12-month period compared to 12.2% of women.


Francke continued: “We need an immediate and collaborative approach to setting things straight. The Government should demand more transparency from companies on pay, naming and shaming organisations that are perpetuating inequality and celebrating those that achieve gender equality in the executive suite and the executive pay packet. The new plans to require companies to report on the number of women in senior positions are also welcome. Government should move ahead with plans to reform parental leave, which will remove one of the barriers that makes it impractical for women to play a greater a part in the workforce.


“But the issue isn’t going to be resolved by legislation alone. Employers need to take action to change corporate cultures. Development opportunities such as mentoring and qualifications have been proven to be highly successful in helping women build the confidence and skills needed to realise their potential. Employers failing to recognise this are missing a trick – create an environment where your staff can thrive, are diverse and are paid fairly, and your business will thrive too.”


Baroness Prosser, Deputy Chair of the Equality and Human Rights Commission, said: “The gender pay and opportunities gaps are intrinsically linked. The opportunities gap leads to the lack of advance for women through the executive pipeline and this in turn provides for the gender pay gap. The onus is squarely on employers to redress the balance, but female executives should also look to make the most of the practical support available to them, whether from the Equality and Human Rights Commission or through professional bodies like the CMI and their Women in Management Networks.”


CMI has worked with top female leaders and its own experts to create a pool of free online resources for women and businesses, available at www.managers.org.uk/paygap. As well as tips from successful women on how to get ahead and tackle gender inequality in the workplace, this combines guidance for employers on topics from coaching and mentoring to flexible working. Practical advice on offer to women includes negotiating effectively, empowerment and marketing yourself.


CMI’s Women in Management (WiM) network works nationally to help address key challenges currently affecting women managers, including opening up opportunities for career progression. As well as offering a supportive environment for managers at all levels and in all sectors, it provides impartial career advice and a wide range of networking opportunities. Tonight will see CMI and WiM join forces with experts including Cherie Blair, Caroline Waters of BT, Baroness Prosser and Liz Jackson of Great Guns at its ‘Women in Leadership beyond 2012’ event. The event will examine ways of tackling the pay gap, covering the importance of mentoring, the executive pipeline and role models.


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  • The 2012 National Management Salary Survey is carried out by XpertHR and supported by the Chartered Management Institute between August 2011 and August 2012. Data was collected from 38,843 employees 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 Robyn or Elizabeth at Kindred on the details above.


  • The £423,390 figure is based on CMI calculations using current data provided by XpertHR. The salary data for men and women has been grouped into age bands to give average salary figures for male and female executives in their 20s, 30s, 40s and 50s. The data for this can be supplied on request.


  • 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, ManagementDirect, 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 provide detailed pay data used by employers in reviewing and setting pay levels. The full survey costs £745 for participating companies. Visit www.xperthr.co.uk for more information. The full survey costs £545 for participants and £1,090 for non-participants.