Progress stalls on closing gender pay gap

Male managers are 40 per cent more likely than female managers to be promoted into higher roles.

Analysis of salary data of more than 60,000 UK employees found that in the past year, 14 per cent of men in management roles were promoted into higher positions compared to 10 per cent of women.

Even allowing for staff turnover, men continue to be promoted ahead of women in management roles. The data reveal that for managers who have stayed with the same employer for the last five years, 47 per cent of men were promoted compared to 39 per cent of women.

The difference in promotion rates is one of the main causes of the gender pay gap, which remains largely unchanged this year at 23.1 per cent compared to 22.8 per cent in 2015.

The average full-time equivalent salary for male managers now stands at £38,817, £8,964 more than the average female manager’s. The pay gap is even higher for those in the ranks of director and CEO, with men on an average basic salary of £131,673 earning £16,513 more than women at the same level.

In November 2015, the Government announced plans for new legislation to tackle the gender pay gap, including making it compulsory for large companies to report on how much they pay their male and female staff. The regulations are due to come into effect in April 2017.

Ann Francke, chief executive of CMI, says that the imminent pay reporting regulations will focus employers on closing the gender pay gap in their organisations: “Promoting men ahead of women is keeping us all back. Diversity delivers better financial results, better culture and better decision making. Even before the new regulations kick in, employers need to get on board with reporting on their recruitment and promotion policies and how much they pay their men and women. Transparency and targets are what we need to deal with stubborn problems like the gender pay gap.”

In other findings, there are also fewer women in executive positions than men. While women comprise 73 per cent of the workforce in entry and junior level roles, female representation drops to 42 per cent at the level of senior management. Just 32 per cent of director-level posts are held by women.

Mark Crail, content director at XpertHR, adds:“The gender pay gap is not primarily about men and women being paid differently for doing the same job. It’s much more about men being present in greater numbers than women the higher up the organisation you go. Our research shows that this gap begins to open up at relatively junior levels and widens – primarily because men are more likely to be promoted.”

Men’s pay further outstrips that of women’s because of a ‘bonus gap’. In the past year, 43 per cent of men received an annual bonus compared to 36 per cent of women. The average men’s bonus stands at £5,398 compared to women’s £2,764. For more senior roles the gap grows, with 54 per cent of male senior managers receiving a bonus compared to 38 per cent females of the same level of seniority. At this level, men command an average bonus of £22,687 compared to women’s £13,699.

The public service sector has the overall lowest gender pay gap of 16 per cent compared to 23 per cent in the private sector. The highest pay gaps are in the manufacturing and not-for-profit sectors, at 24 per cent and 25 per cent respectively.

Employers can start preparing for the gender pay reporting regulations by following CMI’s how-to guide: