Tag: Gender

Gender pay gap in the UK is 16.01%

New research from William Russell revealed the countries around the world that are the most empowering countries for women to live and work – and the UK didn’t make the list.

To score countries and rank them, the team at William Russell looked at a number of factors to create the Female Empowerment Score including:

  • Gender Pay Gap
  • The proportion of women who achieve tertiary education
  • The length of paid maternity leave
  • Female representation in government

The 10 best countries for female empowerment: 

Rank Country Female Empowerment Score 
1 Iceland 7.64
2 Finland 7.62
3 Ireland 7.22
4 Belgium 7.12
5 Denmark 7.04
6 Canada 6.83
7 France 6.77
8 Norway 6.73
9 Sweden 6.67
10 Lithuania 6.64

 

  • Iceland topped the list as the most female-friendly place to live and work, with a female empowerment score of 7.64. This Nordic island nation is well known for its progressive views and welcoming culture with more than half of adult women having achieved tertiary education such as a university degree.
  • Finland took second place with a score of 7.62. Finland has achieved excellent representation for women in its government, with 50% of all ministerial positions occupied by women.
  • Ireland takes third place, with a female empowerment score of 7.22. Ireland has a relatively low gender wage gap of 7.99% and a very competitive 182 days of paid maternity leave for new mothers.

The research also revealed the following:

  • The average gender wage gap around the world is 28%, the UK is above that with 16.01%.
  • The length of paid maternity leave is different all around the world, the average is 6 days. The UK is less than half of that with 42 days, Slovakia gives the most with 238 days.
  • The % of women who achieved tertiary education in the UK (47.7%), is higher than the global average (40.7%). Israel is at the top with 88%.
  • The global average for the proportion of women in ministerial positions is 34.44%. The UK is beneath that with 23.81%, whereas Belgium comes out on top with 57.14%.

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Female board members earn almost half of male counterparts

Research published by New Street Consulting Group revealed that female board members at some of the UK’s largest companies are paid around 40% less than men in the same roles.

While equal pay has been in sharp focus over the last few years, data revealed that the gender pay gap is the widest in the c-suite of corporate Britain. On average, women earned £104,800 for non-executive roles at FTSE 100 companies last year, compared with an average of £170,400 paid to men. For executive board members, average pay was £2.5m for men and £1.5m for women.

In the broader market, women were paid 15.5% less than men, according to 2020 data from the Office for National Statistics.

Darren Hockley, Managing Director at DeltaNet International commented: Despite discussions of the gender pay gap over recent years, and the introduction of gender pay gap reporting, it’s clear that FTSE 100 organisations are still not doing enough to tackle the issue – especially when there’s a 40% difference.  The fact is that unconscious bias remains, and organisations must tackle diversity and equality issues by supporting staff with training. HR must work more closely with executive teams to address equal and fair pay to stamp out social injustice.

“Pay equality responsibility does not just lie with HR; it requires support from everyone in the organisation in order to be addressed. So, more executives need to step up and become an ally for their female colleagues. If they are aware of injustice, then they need to speak up and support their female colleagues to get paid what they deserve.”

40% club

The Financial Conduct Authority recently suggested that UK companies should ensure that at least 40% of board level roles and a minimum of one senior executive role are held by women.

New Street Consulting Director Claire Carter, said “Focusing solely on the percentages of directors that are women is not enough when trying to approach equality.”

The government-backed review of board diversity, the Hampton-Alexander review found that, across the FTSE 350, women now held its 2020 target of an average of 33% board roles. But 130 businesses fell short of this target. Senior board roles remained male dominated, with just 14% of executive directorships held by women. Just 17 chief executives across the FTSE 350 are women.

Most businesses are doing their best to ensure they’re no longer a ‘boys club’ even if the reality of their demographics didn’t live up to aspirations, said Carter.

“The key to doing that will be ensuring that women have more executive responsibilities and are trained and prepared properly for taking on that responsibility,” she said. “It will be a case of their examining whether there are any barriers that are preventing females from reaching the very top at their organisation.”

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Companies with a significant number of women in their executive committees outperformed during the pandemic and are continuing to do so, according to new research.

The Women Count 2021 report, published last week by diversity organisation the Pipeline, found that the persisting gender imbalance in FTSE 350 companies was costing the UK economy more than £100bn per year.

Analysing the performance of firms in the index, it found that in 2021 companies with no females on their executive committees suffered a fall in profits of 17.5%. By contrast, those where more than 50% of the executive committee is female enjoyed profit margins of 21.1%.

It cited the target set by the 2016 Hampton Alexander Review of 33% of women on executive committees and main boards as a key measure of success.

“Using ‘33%’ in the context of levels of profit reveals just how much money is being missed by companies. If all FTSE 350 businesses with less than 33% of women on their executive committee were to achieve the same profit margin as those with 33% and greater, there would be an additional £123 billion in pre-tax profit for the UK economy,” said the report.

Although the 33% target was met in terms of women on boards in the FTSE 350 index as a whole earlier this year, on a company-by-company basis there are still more than 100 in the index that have not met that target.

And The Pipeline argues while the growth in the number of women in non-executive director roles is positive, it’s the executive committee that really matters. Here, overall numbers are well below target, with just 5% of CEO roles and 17% of CFO roles in FTSE 350 companies held by women.

“The data shows how despite numerous initiatives and repeated calls for action over many years, these important PLCs have still to make significant progress on achieving acceptable levels of executive gender diversity. This position belongs to another time, as in today’s world it is recognised that ability is not the preserve of one gender, but equally distributed between men and women.

“Women Count 2021 reveals how far many of the biggest companies have to go in catching up with the times, as in the FTSE 350, women remain second class citizens when it comes to promoting or developing talent,” said the report’s authors.

Commenting on the findings, Nicole Sahin, Founder and CEO of professional employer organisation Globalization Partners, said:

“Time and time again, research shows that organisations that have a high percentage of diversity financially outperform their competitors. However, the reality is that while many women and male allies are championing workplace diversity, only five of the top Financial Times Stock Exchange 100 Index companies are steered by women. And at that current rate of growth, it would take more than 80 years for the number to reach 50%.

“In order to achieve greater balance sooner, management teams must make equality for everyone a priority – from the recruiting process, through professional development and management training. All female leaders need to claim their place at the table.”

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UK universities should be prevented from charging the maximum level of tuition fees unless they deliver better graduate outcomes, a new report from the CIPD has recommended ahead of the Budget next week.

‘The graduate employment gap: expectations versus reality’ shows that just half (52%) of graduates secure a graduate-level job six months after they finish their course. The Government’s official figure is inflated to 77% by including ‘associate professional and technical occupations’ such as dancers, choreographers, fitness instructors, youth and community workers, despite the ONS stating that these jobs ‘do not require a degree’.

The findings call into question the current balance between the Government’s investment in university education relative to the investment in the UK’s under-funded vocational and adult skills education pathways.

The report also shows that the continued focus on boosting graduate qualification rates in the UK appears to have had little effect on productivity, with the UK languishing in sixteenth place in GDP per hour among OECD countries, despite having the fifth highest proportion of residents educated to degree level.

Lizzie Crowley, skills adviser at the CIPD, said, “As we look ahead to the Budget next week, the Government should consider linking tuition fees to graduate destination data in order to prevent higher education institutions charging top rate fees while delivering bottom rate outcomes.

“This report shows that the preoccupation of successive governments with boosting graduate numbers is leading to high levels of over-qualification and potentially skills mismatches, which the OECD suggests undermines productivity growth. Many people in ‘graduate jobs’ are actually in roles that don’t require degrees, and with the spiralling costs of university students need to ask themselves whether a degree path is the best route into their career.

“We need much better careers advice and guidance to ensure that young people are equipped with the information they need to make informed decisions, alongside high quality alternative vocational routes into employment that offer routes other than university education.”

The research also finds a clear gender pay disparity for recent graduates, even if they study the same course at a top ten university.

The findings were consistent across subject area, with male graduates enjoying a higher salary regardless of the areas of study looked at in the research. The research showed that, six months after graduation:

  • More than a quarter (28%) of male law graduates were earning £30k+, compared with just over one in ten (14%) female law graduates
  • Nearly three-quarters (71%) of male medicine and dentistry graduates were earning £30k+, compared to three in five (62%) female graduates
  • More than half (54%) male veterinary sciences graduates were earning £30k+, compared with just two in five (39%) female graduates
  • Female graduates who managed to secure a job in the top occupational band (managers and senior officials) were almost twice as likely to be paid less than £20,000 as their male counterparts, with 25% of women in this category compared with 15% of men

Crowley added, “It has long been claimed that the differential in pay between male and female graduates was to do with their chosen subjects of study, but this data proves that the gender pay gap is baked in from the point of graduation. Regardless of what women study, or indeed where they study, they are paid less than their male peers.

“If we are going to eliminate the gender pay gap then employers need to ensure they are paying fairly right across their organisation from day one, including among recent graduates.”

Finally, the research also reveals that, despite a strong government focus on boosting science, technology, engineering and mathematics (STEM) subjects, STEM graduates are more likely to be unemployed six months after graduation than graduates from other disciplines. Compared to a national unemployment rate of 4.9%, STEM graduate unemployment rates are:

  • 8.6%% for computer science graduates
  • 6.5% for physical science graduates
  • 6% for engineering and technology graduates
  • 6.5% for mathematical science graduates

Crowley said, “The Government has continually focused on boosting STEM skills, and encouraging graduates to pursue those subjects at university, but that investment doesn’t appear to be translating into better graduate outcomes.

“Until we address this problem, and do more to identify the core skills that make STEM subjects so valuable, additional investment in STEM risks being wasted.”

Commenting on the CIPD report, Dr David Docherty, CEO of the National Centre for Universities and Business (NCUB), and Chairman of Placer, said, “Employers are crying out for graduates with vital science, technology, engineering and mathematics (STEM) skills. Therefore, it’s worrying to see that despite an increased focus on STEM education, many graduates in this area are still unemployed six months after graduating.

“It is vital we urgently improve the employability skills of all graduates, particularly those in STEM, to support young people as they move from education into the workplace. One critical part of the solution is improved access to quality work experience for undergraduates so that talented students can enter the labour market more quickly.

“Recognising a significant gap between the availability of work experience opportunities and the number of students in the UK, we’ve developed new technology for employers and students, as a practical step to tackle the issue. Placer, a work experience app and platform developed in partnership with Jisc and Unite Students, offers a structured and scalable solution to ensure the next generation of talent is workplace-ready.”

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