Barriers to career progression for women in financial services
The UK financial services industry gender pay gap average is 22 and 46% for bonuses – one of the worst. In fact, this masks just how bad the gap actually is at the highest level. Research by Fox & Partners found that men represent approximately 91% of those earning over £1 million in the financial services sector. The gap is worsening, with an increase of 17% over the last five years of data available.
Data held by the industry’s regulator in relation to the gender breakdown of individuals holding Director, Non-Executive Directors, Chief Executives and Partner roles, also reveals the same alarming pattern. Less than 20 percent. of those functions were held by women in the years 2013-15, reducing to less than 15 percent in 2017.
Interest in these figures is not about sympathy for those not earning £1 million. They highlight a clear lack of diversity at the top and barriers which exist for women who want to progress in financial services.
What is going wrong?
Not all women do or want to leave their careers to have children; nor are their performance or drive affected by motherhood. In our experience, too often wrongly held perceptions and actions based on them turn into discussions about agreeing exit packages for female employees or partners.
The business case is clear. Research has confirmed that companies with more female executives in decision-making positions continue to generate stronger market returns and superior profits. So, what is going wrong?
Discriminatory policies and procedures are a powerful disincentive to progression. Issues arise in the context of remuneration decisions, selection for redundancy, promotion and for other opportunities that factor into decision-making processes.
Anecdotally (but supported by feedback to the Treasury Committee’s Women in Finance inquiry), there is too great an emphasis on “presenteeism” and not output. There remains a boys’ club culture and the resulting conscious and unconscious bias. They go out for beers, play golf and cricket together in the evenings and weekends and favour each other in pay review, client opportunities and progression. Womens’ networks simply cannot compete without greater representation of women at the top.
What can be done?
Where a woman is treated less favourably than a man because of her sex or policies have the effect of disadvantaging women, for example, because of the greater part they typically play in childcare responsibility, there may be a claim for direct or indirect sex discrimination. The unfavourable treatment of pregnant women or women on maternity leave because of their pregnancy, illness suffered as a result of pregnancy or their exercising their right to maternity leave would also form the basis of a claim. An example might be where pregnancy or maternity leave materially influences an employer’s selection for redundancy.
Claims may be the way forward in some cases. They are likely to be lengthy, costly, potentially reputationally damaging for all involved and often the last thing on most womens’ minds at a time they are feeling most vulnerable. From a practical perspective, a first step is often to ask questions so an employer knows you are informed of your rights and to expose bias and flaws in processes or the culture which appears to be, for example, anti-working parents.
The greatest value of gender pay reporting is the analysis and debate being forced on organisations, which focuses attention on these important issues. The benefit for most is the hope that organisations will be forced to answer difficult questions, learn from them and look at ways to improve.
