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The gender pay gap in investment management has increased since gender pay gap reporting was brought in.
The gender pay gap in the investment management sector has deteriorated since gender pay reporting was introduced, according to new analysis.
A report by PWC and the Diversity Project says the industry recorded an increase of 0.6% in average mean pay gap over the first two years of mandatory reporting, second only to the 1% rise in the education sector.
Of the five sectors with the biggest gender pay gaps in 2018 – banking, investment management, insurance, real estate and travel – only investment management failed to record an overall improvement, says the report. The mean of the median pay gap for investment management is now at 31%, second only to the banking industry’s shortfall of 32%.
The main reason for the gap, the disproportionate number of men in the highest paid roles, is common across all financial services sectors. However, investment management has the lowest percentage of high paid women (just 23.2% of the upper quartile, compared to banking at 24.9% and insurance at 31.5%), says the report.
Jon Terry, Global Financial Services HR Consulting Leader at PwC, said: “Just over half (54%) of investment managers reported a year-on-year reduction in their gender pay gap. However, the majority of these firms saw an improvement of less than 5%. The potential for existing staff and potential recruits to be deterred by the slow and even no progress within many parts of the industry is a major stumbling block.
“When faced with such intensifying pressure, it would be tempting to see diversity and inclusion as a problem to solve. There may even be some fatigue or belief that what benefits some sections of the workforce comes at the cost of others, but seeing diversity and inclusion as peripheral issues or a zero-sum game is a huge missed opportunity.”
The report highlights several key areas where employers can make a change. They include aligning strategy for promoting diversity and inclusion with business priorities, ensuring executive teams set the tone for the organisation and ensure diversity and inclusion are recognised as business priorities, the inclusion of diversity and inclusion metrics in individual performance objectives and incentives, giving all senior leaders and portfolio managers a mentor within either their own firm or through a cross-company scheme such as the 30% Club, encouraging everyone to speak up when they witness poor behaviours and clear communication about plans to change the work culture.