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UK – Female managers to work until 80 if they want to earn as much as men

02 October 2014

New salary figures show that a ‘mid-life pay crisis’ is hitting female managers, with women aged 40+ earning -35% less than men, according to data published by the Chartered Management Institute (CMI) and salary specialists XpertHR.

In order to earn the same as a male manager over their career, a woman would have to work the equivalent of over 14 years more; which, based on a pension age of 65, would mean working until nearly 80.

The data paints a picture of a widening gender pay gap among managers, hitting professional women hardest in the second half of their working lives.

Analysis of the National Management Salary Survey, which covers over 68,000 professional UK workers, shows the monetary value of the gap between men and women aged between 45 and 60 stands at £16,680 per year.

Including men and women of all ages, the current gender pay gap for managers stands at £9,069, with the average salary recorded as £39,461 for men and £30,392 for women. This means women earn three-quarters (77%) of what men in full-time comparable jobs earn – a 23% gender pay gap.

The gap is far worse for women aged 40+, where the problem is two-fold. Not only does the salary gap increase with age and seniority, but there is also a persistent ‘bonus pay gap’. The average bonus for a female director stands at £41,956, while for male directors the average pay-out is £53,010. 

While annual salary increases for men and women, averaged across all levels, have been level-pegging at 2.3%, inequalities remain most obvious at senior levels. Male directors’ basic salaries increased by +2.7% compared with +1.9% for women. When bonus payments are added, male directors took home £204,373 compared to £171,945 for women (an average difference of £32,428).

However, the figures for the next generation of female managers show some cause for optimism. Women’s annual pay awards have edged ahead of men’s in three of the five most junior job levels (an average of +2.4% compared with +2.3%).

The gap still exists for younger women but it is narrower than for their older, more senior colleagues, standing at 6% for those between the ages of 20 to 25, and 8% for those aged between 26 and 35, before leaping upwards for older women.

Ann Francke, Chief Executive of CMI, says: “Lower levels of pay for women managers cannot be justified, yet our extensive data shows the pay gap persists, with many women hit by a ‘mid-life pay crisis’.  Women and men should be paid on the basis of their performance in their particular roles, but this is clearly not yet the case for far too many. It’s not right that women would have to work until almost 80 for the same pay rewards as men. We have to stamp out cultures that excuse this as the result of time out for motherhood and tackle gender bias in pay policies that put too much emphasis on time served.”

XpertHR’s Head of Salary Surveys, Mark Crail, said: “The XpertHR data shows that women begin to fall behind at the age when they are most likely to be starting a family, and it just gets worse from then on. It appears that employers often give up on women in mid-career and are missing out on a huge pool of untapped knowledge, experience and talent.”

For the first time since 2006 more men than women have been made redundant – 1.1% compared to 0.8%. Data also shows that the “executive pipeline” is still failing women, who constitute a majority of entry-level professional roles (69%) but become increasingly rare in more senior management roles (making up just 30% of directors).

Ann Francke concluded: “With the economy looking healthier than ever, it’s the perfect time for employers to expand their talent pool by supporting more women to become senior managers and leaders. CMI is calling for employers to measure and report on the percentage of women at each level of management and what they are paid, which leading employers are increasingly doing.”