Salary data from 21 corporations analysed by Reuters reveals that some of the leading financial organisations in Britain pay women 28.8% less on average than their male counterparts, despite their stated goal of increasing the number of women hired for senior, higher-paid positions.

In the UK, banks, asset managers, and insurers have made a commitment to close the gender pay gap that has existed for a long time. This gap is primarily caused by the fact that more men hold top positions with large bonuses, while a larger percentage of women hold lower-paying, part-time, or junior positions with smaller bonuses or none at all.

According to media calculations based on the salary data, the difference for the top financial services firms has shrunk by two percentage points from a year ago, but it is still far higher than the mean average for all industries in Britain, which was 10.7% last year according to a UK government study.

Businesses in Britain that employ more than 250 people are mandated to reveal the salary and bonus disparities between male and female employees as of 2017. The data disclosure deadline for April 2023 was April 4.

The rate of change in the business is slowed down by the difficulty many large finance companies have in finding and keeping female talent in high-level positions. In certain specific circumstances, the situation has not improved.

Of the 21 top finance businesses whose data was evaluated by the media, the mean pay disparity between men and women at Goldman Sachs’ international division in London increased to 54% in 2023 from 53.2% the year before. This discrepancy continues to be the biggest.

A Goldman representative stated, “We know that we need to do more to increase representation of women at the senior-most levels of the firm. However, it is important to note that this gender pay gap report does not account for pay in similar role or tenure.”

The insurer Admiral revealed the lowest wage gap of the data examined in 2023, with a mean gap of 13.5%.

One question that has arisen due to the slow pace of improvement is why the gap is not closing faster.

“Finance sector employers need to ask themselves some hard questions about why women are not reaching their top ranks – and earning the pay that goes with those jobs,” Ann Francke, CEO of the Chartered Management Institute, said.

A mean pay gap of 43.2% was revealed by HSBC in 2023 for all of its UK businesses. It was stated in 2022 that the average salary difference between men and women was 45.2%.

As per HSBC, 62% of the bank’s employees are in junior roles, making up over half of the workforce. As of April 5, 2023, women made up little less than one-third of the senior leadership team, a 1.4 percentage point increase from 2022.

In 2023, the mean pay gap at Morgan Stanley for its UK workforce shrank from 40.8% to 40.1%, while Barclays’ mean pay gap decreased by 2.3 percentage points to 33.6%.

JP Morgan revealed that their mean pay gap had decreased by 1.5 percentage points to 26.1%. According to the U.S. bank, as of February 2024, the percentage of women in top posts in the UK was 29.5%, the highest since 2018.

Among the banks that Reuters examined, Standard Chartered’s mean pay gap shrank by the greatest amount of percentage points, going from 29% in 2022 to 22% in 2023.

Women’s participation in leadership positions increased, according to the Asia-focused bank, from 25% in December 2016 to 32.5% at the end of December 2023.

According to Aviva, the mean pay gap among asset managers and insurers fell from 24.3% in 2022 to 21.3% in 2023. A 3.9 percentage point narrowing to 24.8% in 2023 was shown by ABRDN.

However, Legal & General reported that its pay disparity increased, rising to 21.3% in 2023 from 20.9% in 2021.

In their gender pay gap reports, every company stated that the disparities were a result of the underrepresentation of women in senior positions and that they were addressing this.

In an effort to encourage the financial services sector to increase the proportion of women in senior positions, the UK government introduced the HM Treasury Women in Finance Charter in March 2016.

Currently, the charter has over 400 signatories, representing over 1.3 million workers.

According to an annual analysis released last month by think tank New Financial, the signatories increased the average percentage of women in senior levels from 34% in 2022 to 35% in 2023.

According to the research, at this rate, the average of those who ratified the Charter should achieve parity in 2038, though not across all industries.

According to research, opens in a new tab by the Institute for Fiscal Studies (IFS), the majority of gender pay discrepancies in the UK are caused by “child penalties,” with average wages for women drastically declining after having a child.

According to the IFS, women’s wages were, on average, less than half of men’s seven years following the birth of their first child.

According to Francke of the CMI, there should be more severe penalties for delayed or inconsistent efforts to address pay disparity across all businesses. These penalties could include fines, denial of employment opportunities in the public or government sectors, or “naming-and-shaming”.

“The evidence tells us firms that represent the wider population – at every level including the top table – make better decisions and deliver better results,” said Francke.

“That alone should be motivation enough to prompt the changes we need to see to close the gender pay gap.”

(Adapted from NetDania.com)

Categories: Economy & Finance, HR & Organization, Regulations & Legal