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The gender pay gap problem in Financial Services: what can be done?

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What does the gender pay gap review mean for your hiring process?

The issue of pay can be a loaded one in any business, but on the4th April the UK marketplacesaw a shake-up as a governmental edict ordered companies to publish the amounts that they paid their employees- and the extent of the gender pay gap.

Though the results have been well publicised, they’re still shocking: across the UK,78% of companies pay men more than women, whilst men make up the majority of higher paid jobs across the marketplace, also coming in for the lion’s share of the bonus. At senior level, things don’t change, as women are hardly present in boardroom positions, andjust one in three firmshave a majority of women in their top earners.

In Financial Services, the results have been particularly damning. Not only do finance firms have the largest bonus gap, but the gender pay gap within the sector is also the largest for any other except for construction. With manyfirms citing a higher proportion of menat senior-level roles, and more women at junior level, as the main reason for the disparity, the number of women in higher-level roles also decrease significantly the higher up the ladder you look: indeed, only6% of chief executives of Financial Services firmsare women.

Clearly, something needs to be done. But what? Diversity has been a pressing issue across the workforce for years, with many companies implementing schemes to encourage women and people from ethnic minorities to apply for jobs- but many more firms cite a culture where stereotyping can be a problem, and women can be penalised for their decision to have children, as well as struggling in a male-oriented culture. The result is that few make it to boardroom level. Many interviewees have also reported that in their experience, it’s hard for women to get promoted, andharder still to be taken seriously when they are

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However, this is something that we can change- and indeed, attitudes are shifting. There are many benefits to hiring women, and in diversifying your workforce: the OECD predicts that equalising the gender pay gapcould increase GDP by 10% by 2030,whilst a recent study by Credit Suisse found that any firm where women made up 15% or more of senior managers had a50% higher profitability that their counterparts.Furthermore, boardrooms with higher levels of diversity have been proven to help businesses connect better with their customer base and build relationships, which in the world of Finance- and especially Wealth Management- is invaluable.

The gender pay gap isn’t going to go away on its own, and steps are being taken to ensure this happens. As part of a push for greater diversity, the government is acting almost as a regulator, requiring companies to release their employee salaries annually, and is spurring companies to act for their bottom line, their reputation and the need to expand their workforce. 

And it’s working: businesses have been positively promoting opportunities at entry-level from diverse backgrounds, whilst many companies have been upgrading their recruitment strategies, requesting that agencies and their in-house teams recruit for a varied candidate list. When it comes to senior roles, many companies are also starting to actively recruit mothers who want to work part time- or including schemes like women’s networks, mentoring schemes,better maternity leave and subsidised childcareto make working life mesh more neatly with their responsibilities as parents. 

This drive for change is also being echoed in the schemes that are being put in place to help progress the role of women in the workplace- and not just at entry-level. Barclays has a comprehensive plan in place to ensure that women take up20% of senior management rolesby 2020, whilst theWomen in Financecharter, championed by Amber Rudd, asks Financial Services firms to take four key actions to ensure better equality in the workplace- and has beensigned by over 160 businesses, committing to ensuring that there are at least 30% of women in senior roles by 2020. In addition to this, the 30% club, a global organisation, aims to achieve aminimum of 30% women on FTSE-100 boards.

There has never been a better time to push yourself and look for a leadership role as a woman. Though the picture of equality at work currently looks bleak, the gender pay gap is a call for change that many companies are heeding, especially within the Financial Services industry. The more diversity companies experience at senior level, the more attitudes will change. 

It’s about time. 

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At IDEX Consulting, we’re proud to connect the best candidates to the best jobs from around the market. If you’re looking to make a change and take charge of your next role as a leader in business, thenbrowse our vacancies here or find out more about salaries in our Salary Guide for Financial Services 2018.