Female managers failing to climb ‘glass pyramids’
The management gender pay gap in Wales is a huge 24%, according to research which has made use of new UK Government reporting requirements on pay for the first time.
According to an analysis of managers’ salaries conducted by the Chartered Management Institute (CMI) and XpertHR, male managers working in Wakes out-earn their female peers by £9,199. While the average salary of a female manager stands at £29,176, for men it is £38,376. This includes salary and bonuses, as well as perks such as car allowance and commission.
Wales’ gender pay gap is slightly lower than it is in UK businesses generally, with the average male manager across the UK earning 26.8% more than female colleagues.
The gender pay gap is particularly high in the Midlands, where male managers on average earn 29.7% more than female colleagues, equating to an £12,000 difference. At the other end of the spectrum, the pay gap is at its lowest in Scotland, where male managers out-earn female colleagues by £7,835, or 21.5%.
Under new UK Government reporting regulations that came into effect in April, large employers (250plus employees) must now publicly disclose the size of their gender pay gap. As of September 21, just 77 of the 7,850 UK companies to which the new law applies have fulfilled their obligations.
This is the first time that pay gap data, compiled by XpertHR, has been published taking into account the new rules. This is based on analysis of salary data of 118,385 managers from 423 organisations over the past year.
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 chief executives cashing-in bonuses six times larger than female counterparts’.
“Our data show we need the Government’s gender pay gap reporting regulations more than ever before. Yet, less than 1% of companies have reported so far. 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.”
The findings also reveal that women are far more likely to fill junior management positions than men (66% v 34%), and men much more likely to occupy senior positions (26% of director-level roles occupied by women, 74% by men).
Yet, even for those women who do progress to more senior roles, the pay gap begins to widen considerably. At director-level positions, it rises to £34,144, with men earning an average of £175,673 and women £141,529.
Bonus payments are also exacerbating the problem, with the gender bonus gap across all managers standing at 46.9%. This increases considerably at C-suite level (the most senior roles like chief executive), where the average bonus for a male chief execuitve is £89,230 compared to £14,945 for a woman – an 83% bonus pay gap.
This year’s analysis suggests that while salary and bonuses are picking up for both men and women, the benefits are going disproportionately to men. Male directors picked up a 5.8% increase in pay and bonuses, compared to 3.7% for women (compared to 4% and 3.3% respectively last year). For managers, men outpaced women by 3.7% to 3.5% (whereas they took home 3.0% and 3.2% increases the year before). That means a real-terms widening of the gender pay gap for many managers.
XpertHR content director Mark Crail said: “We have always known that the gender pay gap appears to widen with seniority. But the results we are publishing today enable us to quantify the gap using a large volume of reliable, checked and verified pay data, drawn directly from employer payroll systems.
“Some people have tried to explain the gender pay gap away as being the result of different working hours or individual career choices. But when the analysis is based on the pay of more than 100,000 individuals in well over 400 organisations, it is clear that the pay gap is a very real fact of life for UK managers.”
Pressure has been building on companies to not only follow the new regulations in disclosing gender pay, but also to publish an action plan detailing the practical steps they are proposing to close the gap.
According to research published last year by management consultants McKinsey, closing the gender pay gap would add up to £150bn a year to the UK economy by 2025. But analysis by CMI shows the scale of the challenge – with the economy needing 1.9m new managers by 2024, 1.5m would have to be women in order to achieve balance.