The financial sector, where women are paid less, get 80% lower bonuses and face entrenched sexist culture

Women working in leading UK financial companies receive around 80% less in ‘performance related pay’ (ie bonuses) than their male colleagues, a report by the Equality and Human Rights Commission has found.

The report is based on a survey sent to 50 top financial firms – which extends from women working in big City investment firms, to those working in high-street banks. These firms employ 22.6% of workers in this sector. Overall, the sector employs roughly equal numbers of men and women.

The key findings:

  • Women employees earned an average of £2,875 in annual performance related pay compared to an average of £14,554 for men – a gender pay gap of 80 per cent.
  • A gap in annual basic pay between women and men of 39 per cent. However, this gender pay gap rises to 47 per cent for annual total earnings when performance related pay, bonuses and overtime are taken into account.
  • Among the organisations who responded, women received significantly lower performance related pay on average than men in 94 per cent of cases.
  • In 86 per cent of responses to the Commission, women who had started their jobs in the last two-and-a-half years had lower starting salaries on average than men starting in the same period.
  • Significant ‘in-grade’ gender pay gaps in at least half of all job grades/categories, where men and women are assumed to be doing the same or equivalent work, were found in 63 per cent of cases.
  • Less than half of cases report making some effort to address the pay gap
  • Only 23 per cent of cases report that they have undertaken an equal pay audit.
  • As a whole, the finance sector has one of the highest overall gender pay gaps in the UK economy – with women working full-time earning 55 per cent less annual gross salary than men. This compares to a pay gap of 28 per cent for the economy generally.

Is it a surprise? Not that a pay gap exists, perhaps, but the scale of that pay gap should shock. Maybe it will finally shock these companies into action – although to my mind it’s not a good sign that 23% of companies have already undertaken equal pay audits, yet the bonus pay gap persists in 94% of cases, suggesting that even this measure of exposing the inequity in pay packets has not forced change.

Also, it’s striking that in 86% of cases women starting jobs in the last 2.5 years are starting on lower salaries, strongly suggesting that these companies are laying down pay injustice and inequality for decades to come. This should be a statistic to file away for those times when people suggest these problems will just fade away in years to come, and they’re just the holdover from less egalitarian times.

One issue the report highlights is that on-paper policies do not necessarily translate into real-life changes. For example, it includes this quote:

‘There was absolutely no flexibility on the firm’s part to even try to fit in my flexible working request as I was told it was really only for secretaries and not for lawyers or professional people … all the policies on paper were not really put in practice at all but to comply with laws and for appearances sake.’

This has a cost to the company, as well as being drastically unfair:

‘One woman who was denied flexible working was a fantastic sales person, one of the senior sales people in the group and the best producers. They wanted her doing 5am to 7pm Monday to Friday, and even if she could find a childcarer who would work those hours, she wanted to see the child during the week. She asked for reduced hours, five days a week, but she asked to come in at 8am rather than 5am. They said no so she left the industry.’

Also, it’s not just a question of being paid less. Unsurprisingly, in companies where women are paid less than men across the board, other kind of sexist attitudes prevail:

The Inquiry heard compelling evidence that underpinning discriminatory managerial attitudes to women was what many witnesses referred to as a very ‘macho’ or ‘lads’ culture in their workplace. One even referred to it as ‘a boys’ club’. It is this culture that denigrates certain tasks, which then become associated with women’s work, from which men are encouraged to progress so that women become ghettoised, contributing to occupational segregation.

This sex stereotyping of work across the sector was compounded by the sexism that was described by some witnesses as pervading wholesale banking, particularly in relation to client networking. It was noted that clients were often ‘entertained’ in lap-dancing clubs, hostess bars or sport activities such as golf, in which women either felt unable or unwilling to participate or were overtly excluded. As one respondent explained:

‘Every single type of activity, whether it was customer-facing or designed to increase cohesion within the organisation was masculine, and so women seemed to be really excluded from participating in all of the informal and other networking.’

As a consequence of being excluded from these client networking activities, women in these organisations were less likely to be able to cultivate clients in the same way as their male colleagues. This sexism also directly impacted in other ways on women’s capacity to secure higher pay. An incident was reported to the Inquiry in which one woman, who wanted to speak to her manager about possible re-grading, was told by the male manager: ‘If you show up for work in fishnets for the next month then maybe we’ll talk about it.’

It actually gets worse, particularly in regards to attitudes to women with children:

These examples of sexism are a feature of a wider cultural issue in which negative attitudes towards women were commonly reported in financial services organisations. Women, according to these witnesses, were often viewed as ‘a maternity risk’. Male managers were reported as holding negative views about women’s potential or actual childcare responsibilities. Sometimes these views were expressed in overt and shocking terms:

‘… a senior director female who had had two periods of pregnancy, the first period of pregnancy when she came back, someone extremely senior within a global banking institution shouted across the room she should shut her legs and make sure she had no more babies …’

Read the whole report here

The report makes four recommendations:

  • Appointing a board member to set the tone, champion the issues and drive change
  • Incorporating equality and diversity into organisational and individual objectives
  • Undertaking annual equal pay audits and publishing the data
  • Ensuring maternity, paternity and parental support schemes are in place and effective
  • Monitoring the implementation and impact of policy on gender equality

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