EngagementDiversity & InclusionWomen denied high paying roles

Women denied high paying roles

Women continue to be excluded from the highest earning positions in business while the overwhelming majority of finance chiefs agree they would promote someone without giving a pay rise.

Women continue to be excluded from the highest earning positions in business while the overwhelming majority of finance chiefs agree they would promote someone without giving a pay rise.

Data published this week shed light on the continued lack of progress for women in work.

Further research may also partly explain why wage growth has stagnated since the end of the recession – with finance directors reluctant to give pay rises until employees are deemed to have earned them.

Law firm Clyde & Co. analysed HM Revenue and Customs data which revealed that the percentage of female high earners in the UK had not changed for five years.

This was despite several high profile government and industry initiatives to promote equality and diversity within businesses, particularly at senior levels.

 

Treading water

Women accounted for just over one quarter (27%) of all higher rate tax payers in each of the last five financial years – last year just 1.26m of the 4.64m higher rate tax payers were women.

The total number of higher rate tax payers grew by over one million individuals and during this time, but the proportion of women remained static.

Clyde & Co. employment partner Heidi Watson said it was clear that the initiatives launched so far have not had an impact on national figures for women in high earning positions.

As a result the gender pay gap had remained stubbornly high.

“The government will be hoping that the new gender pay reporting rules can change that,” she said.

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“While there are no penalties for breaching the rules, the risk of reputational damage is high. Some critics believe the rules lack teeth but the public scrutiny firms will face through naming and shaming is likely to be intense.

“One of the most significant causes of the pay gap for most organisations is the lack of women in senior roles. If an organisation can crack this, they will be way ahead of their competitors.

“This data shows the impact of any current programmes is not yet being felt,” Watson added.

 

A series of damning reports reveal the extent to which women are penalised within the modern workforce.

 

Meanwhile, finance directors overwhelmingly (94%) admitted they would be happy to promote employees without giving them a pay rise.

This was despite more than one in four (27%) acknowledging that those who were turned down for a pay rise immediately started searching for alternate employment.

The main reason given for this decision in the Robert Half research of 200 senior UK finance executives was to assess employee performance in the new role first.

Other main reasons for not giving a pay rise with a promotion included the lack financial resources (27%) and the speed required to fill a vacancy (18%).

One in ten (9%) CFOs and FDs admitted they had promoted employees without increasing their salary because they thought the remuneration was too high for their previous position.

 

Development alternatives

If an employee’s pay rise request was rejected, training was high on the list of alternatives.

Robert Half UK UAE and South America senior managing director Phil Sheridan noted that offering increased responsibility and the opportunity to learn and develop can be one way to boost your employee retention, loyalty and motivation if a pay rise cannot be afforded.

“The risk with this approach in the long-term is that employees start to feel undervalued and with the new skills they have developed, they look to greener pastures to receive a competitive remuneration.

“If companies do adopt a promotion first strategy, scheduling a six month performance review when salary and benefits can be discussed at the same time as confirming the promotion can be an effective strategy to avoid a negative outcome,” he added.

 

Why the taboo of succession planning is leading global firms to reject internal CEO candidates

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