Higher pay rises – but women still more likely to quit

Sep 07 2006 by Nic Paton Print This Article

Women executives are now earning much higher pay rises than men, yet businesses are still failing to stem a tide of resignations among older female employees, a new British survey has suggested.

The study by the Chartered Management Institute and researcher Remuneration Economics has calculated that, in the 12 months to January, women saw their earning rise on average by 6.7 per cent, compared with 5.6 per cent for men.

The increase was also the highest movement in earnings for five years, the two organisations said.

At director level, the gap was even more pronounced, with female earnings increasing by 9.2 per cent against only 5.8 per cent for their male counterparts.

Women in team leadership roles were awarded an increase of 6.6 per cent compared with 5.2 per cent for men.

In real terms this meant that female managers earned an average of £43,521 in the year to January 2006, said the CMI.

But this was still £5,147 less than the male equivalent of £48,668 – an 11.8 per cent difference.

The gap at director level was £40,588, with the average female director earning £164,762.

But in organisations with turnover of less than £25m, women directors came out on top, earning £127,369 compared with £116,511 for men.

The findings come a day after a study by UK employment law firm Peninsula suggested that the vast majority of women believe their organisations are biased against them and feel intimidated at work simply because of their gender.

Three-quarters said they had experienced gender-based bullying at work and more than eight out of 10 felt that being female was harming their chances of career progression.

The CMI survey also found that bonuses were playing an increasingly important part in overall "take home" pay.

The majority of employers (79 per cent) gave bonus payments to staff in the 12 months to January 2006, but women were more frequent recipients.

Almost three-quarters (71 per cent) of female executives were rewarded with a bonus compared with fewer than two-thirds of men (58 per cent).

Smaller organisations, again, were more likely to give women greater rewards. In organisations with a turnover of less than £25m, women received an average bonus of £7,207 compared with £5,148 for men.

Yet, despite larger pay awards and higher incidents of bonuses, women were still more likely to resign, the survey also found.

Female resignation rates stood at 5.7 per cent, compared with 4 per cent for men.

The region with the highest female resignation rate was East Anglia (11.8 per cent) and the manufacturing sector (15.3 per cent) had the highest female resignation rate compared with any other industry.

The 2006 survey also indicated that, despite the narrowing of pay differences for female managers, gender inequalities persist.

For example, the number of women in team leadership roles had fallen to its lowest level for five years (32.5 per cent) and the gender pay gap had also grown as individuals got older (from £297 at the age of 25 or less to over £10,000 from age 50).

Jo Causon, CMI director of marketing and corporate affairs, said: "More than 30 years after sex discrimination legislation was introduced, some inroads appear to have been made in the workplace.

"However, inequalities are still evident in pay packets and promotion and unless employers address the issue they are in danger of seeing a continuation of the trend in senior female executive resignations," she added.

It was also clear that the proportion of women as part of the UK workforce tended to decline with age.

Among the younger management community (aged 29 or lower), women occupied the majority of roles (55 per cent), but from age 35 there was a sharp decline.

Between the ages of 35-39 women only accounted for one-third of managers. From age 50 onwards this dropped to 11 per cent.

Val Lawson, chair of the Women in Management Network, said: "This trend may be attributed to the number of women taking career breaks and potentially reflects the lower proportion of women in higher education thirty years ago.

"However, it is a pattern that must be reversed because, allowed to continue, it will deny employers access to a considerable pool of talent," she added.