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Gender pay gap widens at executive level

Businesses alienate top female employees, says Chartered Management Institute

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Senior female executives continue to be paid less than their male counterparts, revealing a gender pay gap of £10,546, according to the latest research released on Wednesday.

At current rates of growth it’ll take almost a century to close the gender pay gap, according to the 2011 National Management Salary Survey, which revealed that men continue to be paid more on average than women doing the same jobs (£42,441 compared to £31,895) despite salaries for women executives rising faster than men’s.

The research will disappoint those lobbying for greater representation of women on British boardrooms and adds to a growing body of research showing that little progress is being made in encouraging women to rise to executive level.

On the upside the survey found that at junior levels women earned as much as men for the first time since CMI records began. Earning an average salary of £21,969, female junior executives in the UK are currently being paid marginally more (£602) than male executives at the same level, whose average salary is £21,367.

Salary increases for both men and women fell on last year‘s survey, showing  2.1% and 2.4% rises respectively compared to 2.3% and 2.8% last year.

Petra Wilton, CMI’s director of policy and research, said: “ … this year’s salary survey demonstrates, yet again, that businesses are contributing to the persistent gender pay gap and alienating top female employees by continuing to pay men and women unequally. This kind of bad management is damaging UK businesses and must be addressed.

“It is the responsibility of every executive – both female and male, organisation and the government to help bring about change. Diversity shouldn’t be seen as something that has to be accommodated, but something that must be celebrated.

Wilton however stepped back from demanding mandatory quotas or forcing companies to reveal salaries to balance the pay gap.

“Imposing mandatory quotas and forcing organisations to reveal salaries is not the solution. We need the government to scrutinise organisational pay, demand more transparency from companies on pay bandings and publicly expose organisations found guilty of fuelling the gender pay gap,” said Wilton.

Outside London and the South East, women should look to the South West (£31,247) and Scotland (£30,652) for the best pay packets, the study found, with salaries most equal in Wales where the pay gap is £2,441.

The gender pay gap is biggest in Northern Ireland (the average male executive salary is £13,793 more than that of female executives), followed by the Midlands (£11,346) and London (£11,129).

Phillippa Williamson, CMI companion and CEO of the Serious Fraud Office, said: “There is a clear business case for equal pay; evidence shows that companies where women are well represented at every organisational level from board level down perform better. Organisational performance will be improved by ensuring high quality managers and leaders are in place; gender shouldn’t come into it.”

Sandra Pollock, national chair of CMI’s Women in Management (WiM) network said despite Lord Davies’ report calling for more women in boardrooms and the 30 Percent Club launching, “it’s disappointing to find that, at the current rate of increase it would be almost a century before men and women in executive jobs are paid equally”.

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The Editor's blog on diversity



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