Gender pay gap

New “1pc” trend emerges as gender pay gap widens in top-earning UK jobs

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Everyone has heard the term “the one per cent”, and in UK terms, if that’s you, then you’re one of 310,000 people here earning the highest income. You’ll be the recipient of a taxable income of at least £160,00, while £236,000 gets you into the top 0.5 per cent, and just under £650,000 will place you right into the 0.1 per cent bracket.

HMRC data shows that the top one per cent of income tax payers are mostly male and middle-aged, and when it comes to location, London is the top place to find them. Additionally, this group of people receive around 14 per cent of total national income.

Women, however, are significantly underrepresented in these figures, giving rise to a new and worrying trend within the top one per cent of earners.

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Many women are already on the back foot when it comes to compensation, career progression, access to c-suite and senior leadership roles––and even when it comes to things like pension parity. Official data confirms that in April 2023, median pay for all employees was 14.3 per cent less for women than it was for men.

And when it comes to working mums, a 2023 study found that 40 per cent of this cohort have turned down a promotion due to childcare pressures, they are 1.4 times more likely to feel the financial burden of childcare costs compared to working fathers, and only 31 per cent have access to crucial flexible working arrangements.

Now, new analysis from the London School of Economics (LSE) has found that both the pay gap and career progression has disimproved since before the pandemic.

LSE found that women occupy 19.4 per cent of the top one per cent highest finance and professional services roles, but that this is down from the three year pre-Covid average of 19.7 per cent.

This might not sound like much, and indeed within women’s share of the top 10 per cent of roles, they actually gained 2.5 per cent in the same period.

Women at a disadvantage

But the analysis’ researchers also identified the pandemic period as particularly detrimental to women’s career and pay progression. Layoffs in the US disproportionately affected women, according to that country’s official statistics source.

And with companies such as Meta, Tesla, Wayfair and X slashing their diversity, equity and inclusion (DEI) programmes, this further disadvantages women – particularly those of colour.

“We are going backwards, but I am not surprised,” says Dr Grace Lordan, who is the founding director of The Inclusion Initiative at LSE, and associate professor in its Department of Psychological and Behavioural Science.

“For progress to be made there needs to be a bigger shift towards recognising that diversity is good for business. There also needs to be significant investment in upskilling managers to become inclusive leaders recognizing that leading diverse teams is a skill,” she said.

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So what can be done? Hybrid and flexible working is what women want. According to The Women’s Organisation, studies show that while women are predominantly the main caregivers in UK households, the traditional nine to five structure doesn’t tend to work so well with competing demands.

The rising cost of childcare in Britain is another worry. The Organisation calls for shorter, more flexible hours as “a practical solution to this challenge”. But new fears are emerging that remote working can harm career progression, even if it solves the puzzle of parenting.

Dell, for example, has introduced a policy that precludes its remote workers from promotions unless they commit to being in the office for at least three days a week. With ongoing return to the office mandates changing the working landscape back to its pre-pandemic topography, it is clear that for women, more remains to be done.

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Article written by Kirstie McDermott at Amply.

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