Despite wide publicity and huge government efforts, the gender pay gap is still a serious issue, affecting many women in most industries. Across the U.K.’s finance industry, women earn on average, 27.2% less than men an hour. In bonuses, the gap is almost 50%.
Research shows that progress on gender pay in finance has been too slow and irregular over the past ten years. Legislation has required companies with more than 250 employees to include their employee pay in an annual report each April.
The purpose of this requirement was to increase transparency which would reduce the pay gap among genders, but the numbers so far suggest this is not enough.
The government’s Equality and Human Rights Commission exposed the large gender pay gap in the finance sector as well as the long working hours, inflexible work and a male-biased culture.
Research also found that there was only a marginal drop instead of a radical change in the pay gap since the recession. The study reports that the gender pay gap is substantially higher among the financial industry’s highest earners at 58.6% compared to 13.8% among the lowest earners. So, the more successful a woman, the greater is the pay gap between her and her male counterpart.
There was no improvement in the pay gap among the lowest earners over the period considered for the study.
Trade union membership has declined in recent decades but companies with union membership and collective bargaining showed a reduction in the gender pay gap.
One area of concern is that ethnicity was related to a higher pay gap. Other contributing factors are the post-recession increase in working hours, which is difficult for women who have caring responsibilities, and “presenteeism” or staying at work longer than expected, which is considered part of a male culture in which women may be excluded or exclude themselves.
Just for show?
Financial firms are clearly investing in diversity strategies but are they just for show or just poorly implemented strategies?
An example includes the Lloyds Banking group’s Inclusion and Diversity Strategy to narrow the pay gap and increase the proportion of women in senior roles. It was a diversity initiative that received numerous accolades but so far has done little to improve the bank’s average pay gap of 31.5% in 2018 (the finance sector average is 27.2%).
As a whole, the finance sector continues to be full of discriminatory practices with respect to pay and unequal treatment favouring men and disincentivising women.
It appears that gender equality is still not a strategic priority because the second round of reporting due in April 2019 is already showing a worsened pay gap in some companies. Change is not likely to happen without external pressure, whether from unions, pressure groups and women’s networks. The ultimate solution is for the state to introduce more financial sanctions on organisations that don’t show any improvement in closing the gender pay gap.