Pay gap highlighted for female executives

Female executives in the UK are paid around nine per cent less than their male counterparts, according to a Europe-wide survey by human resources consultancy Mercer published today.

Female executives in the UK are paid around nine per cent less than their male counterparts, according to a Europe-wide survey by human resources consultancy Mercer published today.

Mercer analysed the pay of 264,000 senior management and executives in 5,321 companies across 41 European countries and found part-time work and women’s tendency to work more in certain sectors may be to blame for some of the pay discrepancy.

In Western Europe, the research showed the greatest pay disparity occurred in Germany where women executives were paid 22% less than the total compensation of their male counterparts, followed by Austria (-20%), Sweden (-19%), Spain and Greece (both -18%), France and the Netherlands (both -14%), Denmark (-12%), Ireland (-10%), Italy, Finland, UK and Portugal (-9%), Norway (-8%), Switzerland (-7%) and Belgium (-6%).

According to Sophie Black, principal in Mercer’s executive remuneration team: “Simple discrimination on pay is often the reason behind salary differences, but there are other factors at play here. Women, more than men, tend to move in and out of the workforce often due to childcare responsibilities. Many women have to take part-time work to balance competing family and financial demands. This has a huge impact, not only on the numbers of women in senior positions but also on their earning-power. A woman may be paid less than her male peers because the five years she spent off the corporate ladder represents, in the eyes of her employer, five years less experience.

Part-time workers tend to earn less than their permanent colleagues and are often perceived as less loyal and committed. This can lead to lost promotional opportunities and pay rises. This is a cultural issue and is still a hurdle that many women need to overcome in numerous firms today, even those companies which on the surface appear to encourage part-time work as part of their gender diversity programmes.”

Another cause of the gender pay gap is ‘occupational segregation’, a term used to describe how support, or ‘function’ roles, like HR and Marketing, tend to be dominated by women. These roles tend to be paid less, and are often perceived as less business critical, than core activities such as sales or operations, which tend to be dominated by men. While a company may have equal amounts of men and women in executive positions, their role in the corporate hierarchy – occupational segregation – will show women underperforming their male counterparts in pay awards.

Education also plays a part in perpetuating the situation,” says Black. “If men and women are encouraged to think that everything is within reach, then occupational segregation will be undermined and companies will see a much more diverse workforce. This can be a huge bonus to companies as it widens their talent pool, reduces turnover and absenteeism and increases innovation and creativity.”

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