Break down in gender pay barrier.

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New figures released today by the Chartered Management Institute (CMI) show that female executives are earning as much as their male counterparts for the first time since its records began, albeit only at junior executive level.
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.

However, the average figures across the whole sample of 34,158 UK executives surveyed by XpertHR on behalf of CMI suggest equal pay for male and female executives across all seniority levels remains a long way off. According to the 2011 National Management Salary Survey, men continue to be paid more on average than women doing the same jobs (£42,441 compared to £31,895), revealing a gender pay gap of £10,546.

This persistent gap means that, despite the fact that salaries for female executives as a whole are currently increasing faster than those of their male counterparts (female salaries increased by 2.4% during the 12 months between February 2010 to February 2011, a 0.3% higher rate of increase than for male salaries), if male and female salaries continued to increase at current rates, it would be 2109 – 98 years – before the average salary for female executives catches up with that of their male peers.

At £10,546, this year’s pay gap is slightly bigger than the gap of £10,031 which was revealed last year in the 2010 Salary Survey. In addition, salary increases for both male and female executives have fallen since last year‘s Survey – in the 2010 Survey male salaries were found to have risen by 2.3% and female salaries by 2.8%, whereas this year’s figures are 2.1% and 2.4% respectively. The difference between female and male pay rises has, therefore, narrowed year-on-year.

Responding to the report, CMI’s Director of Policy and Research, Petra Wilton, said: “While CMI is delighted that junior female executives have caught up with males at the same level, 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. 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. They and employers must ensure that women are nurtured and supported at work, and can access development opportunities to help them on their way to senior management positions. We want to see mentoring and sponsorship programmes in more businesses and industries and more female executives pushing their employers to formalise and publicise equal pay and opportunity policies.”

The research reveals that redundancy hit men and women equally hard between February 2010 and February 2011, with 2.2% of male executives and the same percentage of female executives losing their jobs. For female executives, this is an encouraging shift from last year when 3% of men were made redundant compared to 4.5% of women. The figures show women at more senior levels are being adversely affected by redundancy, however; at function head level, women are almost twice as likely as men to have been made redundant (2.7% of male function heads were made redundant compared to 4.9% of female function heads), while almost five times as many female directors as male directors lost their jobs (0.6% of men compared to 2.9% of women).

Resignation data shows more women than men are quitting their jobs (4.2% compared to 3.6%) and female executives are marginally more likely than men to transfer roles within the same company (3.4% compared to 3.3%).

Looking at the nations and regions, outside London (average female executive salary of £42,517) and the South East (£33,427), where female salaries are unsurprisingly highest, women should look to the South West (£31,247) and Scotland (£30,652) for the best pay packets. 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). Salaries are most equal in Wales where the pay gap is £2,441.

Phillippa Williamson, CMI Companion and Chief Executive of the Serious Fraud Office, comments: “As an employer, it’s frustrating that, at a time when things are still very tough for UK organisations, business leaders are missing a trick by not ensuring they pay their employees fairly. Companies that refuse to prove to talented women that they will be valued and rewarded as much as men won’t be able to recruit or retain the best employees and risk losing them to competitors. 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: “There has been a lot of very welcome noise recently about getting more women into senior positions in UK organisations, for example Lord Davies’ report into women in boardrooms and the 30 Percent Club launching, so 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. Why should a woman take on the responsibilities of a director-level position when the likelihood is still that she will be paid significantly less than the man sitting next to her at the boardroom table?

“Too often managers are male and aged 45 plus and we are fighting an ongoing war to ensure that professions attract people based on their talent and not their age or gender. True organisational diversity can’t be achieved until organisations pay men and women equally. The research launched today does, however, show that we have won our first battle – it is wonderful to see that the gender pay gap at junior executive level has closed and we hope this continues as this generation climb the ranks of management.”

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