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Mind the gap – gender bias in bonuses highlighted

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It is that time of year again when pay and bonuses are reviewed.  A report by the Chartered Management Institute (CMI) shows that the existing gender pay gap is being exacerbated by a 50 per cent bonus pay gap.  Male managers earned average bonuses twice the size of their female counterparts over the past year – £6,442 compared with £3,029.  It is estimated that over the course of a working lifetime men stand to earn over £141,500 more than women doing the same role.

Both the gender bonus and gender pay gaps are more pronounced at senior levels.  At £36,270, female directors’ bonuses were approximately half of the average amount taken home by male directors in the past year – £63,700.  Employers are ultimately responsible for ensuring that their pay systems are free from gender bias.  While the Government’s current proposals on equal pay audits may stop short of requiring employers to undertake equal pay audits unless they are found to be in breach of equal pay laws and are ordered to do so by an Employment Tribunal, employers should review their pay systems regularly to ensure that there is no unlawful bias.  Organisations failing to address equal pay issues could end up on the receiving end of equal pay claims. 

The CMI has set out a roadmap for a culture change with a view to reducing the gender bonus and pay gaps.  This focuses on three key areas:

1)    Measure and report on equality – the CMI recommends that all organisations should set targets for the percentage of women and men at junior, middle and top levels and publish progress against these;

2)    Extend flexible working for men and women – flexible working options and shared parental leave may help bring about a culture change;

3)    Sponsor, mentor and develop - to give women the confidence to aspire to top roles and the skills needed to get there.

It is also worth noting that earlier in the year Boardwatch UK recorded the first fall in the percentage of women on boards since 1999.  If the number of women on boards is increased, and in particular those boards and committees making decisions on remuneration and bonuses, we may start to see a decrease in the gender bonus and gender pay gaps.


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