June 12, 2018
Pay rates for senior management reflect longer working hours argues CMI
Business Secretary Greg Clark proposed new laws in Parliament yesterday (June 11th) that new large firms will have to justify their chief executives’ salaries and reveal the gap to their average UK worker. It means that for the first time, UK listed companies with more than 250 UK employees will have to disclose and explain this difference – known as ‘pay ratios’ – every year. However, according to data published today by the Chartered Management Institute (CMI) and XpertHR, basic salaries for senior managers have fallen in real terms, with inflation overtaking pay increases for the first time in five years. At a time when government are shining a light on executive pay, and linking it via a ratio to workforce pay, separate CMI research has found managers worked an extra 44 days a year last year over and above their contracted hours – up from 40 days extra in 2015. The same research found 59 percent of managers are ‘always on’, frequently checking their emails outside of work and one in 10 had been forced to take sick leave because of stress.
Demand for labour is likely to remain relatively strong in the near-term which is one of the main reasons why employers support a national approach to tackling the UK’s skill and labour shortages post-Brexit, in comparison with a regional or sectoral one. According to the latest quarterly Labour Market Outlook from the CIPD and The Adecco Group the preference for a national labour or skills shortage occupation scheme reflects the main reason given by organisations for employing EU nationals, which is that they have difficulty finding local applicants to fill lower skilled roles, as cited by 18 percent of employers. The national survey of more than 2,000 employers found that the relative majority of employers (41 percent) would prefer a UK-wide immigration system that is based on national labour or skill shortage occupations in the likely event of migration restrictions once the UK leaves the European Union. In contrast, around one in ten (13 percent) favour a sector-based policy and just 5 percent would back a regional policy.
UK employment is predicted to grow strongly in the third quarter of 2017, but wage growth is likely to remain weak, according to the latest CIPD/The Adecco Group Labour Market Outlook. Although the UK labour market remains buoyant, basic pay award expectations for the next 12 months remain at just 1 percent. Put against the backdrop of poor productivity growth, the report points to an increase in labour supply over the past year as a key factor behind the modest pay projection. This is driven by relatively sharp increases in the number of non-UK nationals from the EU, ex-welfare claimants and 50-64 year olds. This increase in labour supply may explain why the jobs market remains challenging for some jobseekers, especially those seeking lower-skilled jobs. Employers report a median number of 24 applicants for the last low-skilled vacancy they tried to fill, compared with 19 candidates for the last medium-skilled vacancy and eight applicants for the last high-skilled vacancy they were seeking to fill. Overall, employers felt that around half of applicants were suitable for each role they were trying to fill.
A new piece of academic research provides more evidence that the underlying reason for the gender pay gap is the discrepancy between the way women with children are treated compared to men, and other women without children. According to new research from Université Paris-Saclay, mothers are paid 3 percent less for every child they have compared to their female colleagues who do not have children, while fathers suffer no such penalty at all. The figures were compiled from a 16-year study of data from organisations in the French private sector between 1995 and 2011 by Lionel Wilner, Director of Graduate Studies at engineering and statistics school ENSAE, a founding member of Université Paris-Saclay. He separated the effect of childbirth from other firm-specific wage determinants, and accounted for full-time and part-time work, to find that the difference between mothers and non-mothers is approximated a 3 percent lower hourly wage. The effect was found to be more pronounced after the birth of the first child. 
In this week’s 
November 10, 2017
Warnings of widening gender pay gap as women are hit hardest by low pay
by Sara Bean • Comment, Flexible working, News, Wellbeing, Workplace
It is Equal Pay Day today (Friday 10th November) – the day in the year which is marked in the calendar as the one where women start to work for free, and the campaigning charity the Fawcett Society has warned that the pay gap is actually widening for some groups of women and will now take 100 years to close, based on the current rate of change. Research by the Living Wage Foundation published to mark the day has also revealed women are hit hardest by low pay in the UK. Women make up nearly two thirds (62 percent) of workers currently struggling to make ends meet on less than the real Living Wage claims the Foundation, which amounts to 3.4 million women compared to 2.1 million men. Nearly 1/3 of all UK working women (26 percent) are still earning less than the Living Wage, compared to just 16 percent of all working men. And this trend has been the case since 2011, when KPMG and the Living Wage Foundation launched its annual Living Wage report.
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