New transparency rules reveal alarming pay discrepancy between male and female managers

25 September 2017 -

Gender Pay Gap

Six months on from the start of the new reporting regulations, and the gender pay gap persists – and as for the bonus gap...

Matt Scott

New ways of measuring how much men and women are paid under far-reaching government reporting requirements have revealed that the gender pay gap for the UK’s 3.3 million managers is nearly £3,000 bigger than previously understood.

New research from CMI and XpertHR has found that the gender pay gap as calculated under the new regulations stands at 26.8%, with male managers on average out-earning female peers by £11,606 a year.

This new analysis, which includes salary and bonuses, as well as perks such as car allowance and commission, has resulted in a 3.5 percentage point increase in the pay gap, with last year’s analysis of the pay gap based on managers’ basic salaries putting the gap at 23.1%, or £8,964.

Even without applying the new calculations, this year’s data show that this basic salary gap is slightly worse at 23.6%, or £9,326.

CMI chief executive Ann Francke said: “Too many businesses are like ‘glass pyramids’ with women holding the majority of lower-paid junior roles and far fewer reaching the top. We now see those extra perks of senior management roles are creating a gender pay gap wider than previously understood. The picture is worst at the top, with male CEOs cashing-in bonuses six times larger than female counterparts.”

Under the government’s reporting regulations that came into effect in April 2017, large employers with more than 250 employees must now publicly disclose the size of their gender pay gap.

To date, just 72 out of the 7,850 UK companies to which the new law applies have fulfilled their obligations.

Francke said that is was essential for more business to get on board with the new reporting agenda if they are to thrive in the modern business landscape.

“Our data show we need the government’s gender pay gap reporting regulations more than ever before,” she said. “Yet, less than 1% of companies have reported so far. It is now time for more companies to step up and put plans in place to fix this issue.

“It’s essential if UK companies are to survive and thrive in the post-Brexit world.”

Further analysis of pay rises over the last 12 months has also revealed that the problem is worsening, despite pay rises and bonus payments increasing for both men and women,

Male directors picked up a 5.8% increase in pay and bonuses, compared to 3.7% for women (2016: 4.0% and 3.3%). For managers, men outpaced women by 3.7% to 3.5% (2016: 3.0% and 3.2% respectively), meaning that in real-terms the gender pay gap is widening.

CMI Women: Promoting the rise of women in management

CMI is all about developing and enabling brilliant leaders; giving them the management skills they need to fulfill their own potential and unlock the potential of others.

At the heart of this commitment is a belief that diversity is the foundation for good leadership and management as it improves financials, creates a better culture and ensures less risky decision making.

That's why we've launched CMI Women. We want organisations to embrace gender diversity and put it at the heart of their agenda and business practice.

To find out how you can help contribute to achieving our aim and improving diversity in your organisation, click here

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