Guest employment law blog post from employment lawyers based in Edinburgh, Scotland. Contact ELE for specialist employment law advice today.
The gender pay gap costs women executives around £400,000 over the course of their careers, according to the latest figures from the Chartered Management Institute (CMI). The issue is partly caused by the opportunities gap, which sees women in the majority at junior level, but still very much in the minority in the senior ranks.
“The gender pay and opportunities gaps are intrinsically linked,” explains Baroness Prosser, Deputy Chair of the Equality and Human Rights Commission. “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.”
Lifetime earnings gap
The CMI research, based on data collected by salary survey specialists XpertHR, reveals 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.
Annual rewards gap
This year’s survey also reveals that the gender pay gap extends to annual rewards.
Of 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.
The 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.
On top of this, more women than men fell foul of job cuts in the 12 months to August 2012, says the survey. It reveals that 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.
Talent management pipeline
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%).
According to Ann Francke, CMI Chief Executive, while there has been a lot of attention given to getting more women on boards, there is still 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,” she said. “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.”