Battle of the bonuses!

CMINew salary figures show the existing gender pay gap is being aggravated by a 50 per cent bonus pay gap.

The data, published annually by CMI (Chartered Management Institute) and salary specialists XpertHR, reveals male managers earned average bonuses twice as big as those of their female counterparts over the last 12 months – £6,442 compared to £3,029 – on top of average basic salaries almost 25 per cent bigger (£38,169 compared to £29,667). Analysis of the National Management Salary Survey, which includes data from more than 43,000 UK workers, shows men stand to earn over £141,500 more in bonuses than women doing the same role over the course of a working lifetime.

Both the gender bonus and gender pay gaps are more pronounced at senior levels. At £36,270, female directors’ bonuses are dwarfed by the average amount taken home by male directors in the last year – £63,700. Even without taking bonuses into account, the data shows that the gender pay gap increases with each rung of the management ladder. At entry level women are faring better, earning £989 more than men on average, but by middle-management they receive £1,760 less than men and at director level the gap widens to £15,561 (an average basic salary of £140,586 for men and £125,025 for women).

Ann Francke, CMI Chief Executive says,

“Despite genuine efforts to get more women onto boards, it’s disappointing to find that not only has progress stalled, but women are also losing ground at senior levels.  Women are the majority of the workforce at entry level but still lose out on top positions and top pay. The time has come to tackle this situation more systemically.”

Men are more likely than women to get a bonus across all management levels (42.3 per cent compared to 40.6 per cent), but this gap is biggest at director level: 42 per cent of female directors took home a bonus in the past year, compared to 52 per cent of men.  Similarly, while male managers’ earnings across all levels are rising faster than women’s for the first time in five years (3.2 per cent compared to 2.8 per cent including bonuses), male directors’ earnings rose 5.3 per cent over the last 12 months, compared to just 1.1 per cent for female directors.

Analysis of the ‘executive pipeline’ continues to show a steep drop off in female talent from middle-management levels onwards. More women than men continue to embark on executive careers – 64.3 per cent of entry-level staff are female. However, at middle-management level, just 44.3 per cent are women and fewer than a quarter of board directors (24.1 per cent) are female.

Ann continues,

“The evidence is clear. Diversity delivers results. If organisations don’t tap into and develop their female talent right through to the highest levels, they will miss out on growth, employee engagement, and more ethical management cultures. And that’s not good for business.”

XpertHR’s head of salary surveys, Mark Crail, says:

“There is no good reason for men to still be earning more in bonuses than women when they are in very similar jobs. But it’s often the case that men and women have different career paths, with ‘male’ roles more likely to attract bonuses.  While women are generally getting lower bonuses than men, especially at senior levels, they may be entering occupations where there is less of a culture of bonus payments. The question for employers is why that’s the case.”

In response to the findings, CMI has set out a roadmap for culture change, focusing on three key areas:

  • Measure and report on equality. Diverse organisations perform better on hard and soft measures. All organisations should set targets for the percentage of women and men at junior, middle and top levels and publish progress against these. Government should demand this level of transparency from companies – highlighting good examples and naming and shaming those failing
  • Extend flexible working for men and women. Flexible working options and shared parental leave will help bring about a culture shift. Greater flexibility, especially at the top, appeals to both sexes – and can help reshape cultural norms
  • Sponsor, mentor, develop. Sponsorship and mentoring of talented women should be part of an organisation’s DNA. These opportunities give women the confidence to aspire to top roles and the skills needed to get there. Back this up with training, experience and qualifications to prepare them for future leadership roles.

Minister for Women and Equalities Maria Miller said:

“These figures are yet another damaging example highlighting that, in the world of work, women still lose out to their male counterparts and that the playing field is far from equal.

“Changes in the workplace are happening and it’s good that the pay gap is closing – but there is still more to do before we see full equality in the workplace. The government is playing its part, we have made pay secrecy clauses illegal; given tribunals the power to force employers who break equal pay laws to carry out equal pay audits and signed 120 companies up to our Think, Act, Report which encourages companies to and improve the way they recruit, promote and pay women. We’ve also looked at other pay gap causes such as having to juggle work and family responsibilities by introducing shared parental leave and the right to request flexible working to all employees.”

For more practical advice on how to develop female talent, visit www.managers.org.uk/genderpaygap

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