The recent Government-backed review into Women in Finance has put our sector under the spotlight when it comes to gender equality issues. The review acknowledges that the sector is lagging behind when it comes to addressing the persistent gender pay gap, increasing gender diversity in the workforce and ensuring better male-female representation at senior levels.
At the same time, the Government has announced, as part of a range of gender equality reforms, that companies with over 250 employees will have to start reporting on precisely these measures, with league tables to be published detailing their performance, setting a clear challenge to the sector's biggest employers.
Because the gender pay gap is typically higher for occupations where women are under-represented - particularly at senior levels - finance is often cited as an example of where change is most needed. Indeed, ONS figures suggest the difference between the average of earnings of men and women as a percentage of men's earnings is as big as 35.9% for those who work in financial and insurance activities and AAT's own biennial survey of its accountancy and finance membership in 2015 showed that men working full time earned 18% more than women, with this gap widening to 23% for members at more senior membership levels. Figures on male-female representation suggest women make up just a third of managers in the financial sector and that only 11% of corporate managers or senior executives in banking are women.
There are some who ask why this should matter to business and put it down to the fact that some women will take at least a short amount of time out of work to start families, so it follows that their salaries and career progression take a hit. 'It's always been that way' is a view given in our research by 58% of respondents. This view could be a big factor contributing to the pay and progression gaps that persistent in the sector - more on that in a moment.
In fact, and this should chime with anyone working in finance, it's all about the bottom line. There's a growing body of research that shows gender diversity positively affects many key aspects of organisational performance, including revenue, attracting and retaining talented employees, job satisfaction lelves, helping organisations become more attuned to their customers and facilitating innovation and creativity. More balanced boards have also been found to boost company earnings and lead to more responsible, ethical decision making. Looking economy-wide, the Women in Work Commission found that unleashing untapped female potential could raise £23 billion a year to the Exchequer.
While the gap and senior-level under-representation of women in the finance sector is often reported, little has been offered in terms of clear information about what's holding back change in an otherwise fast-evolving sector. This is something AAT's new white paper seeks to remedy, exploring the experiences and attitudes of those working in the sector to help organisations develop, retain and attract top talent, meet the requirements of the new reforms, and reap the business benefits of diversity.
What we found was that men and women experience the working world in finance very differently, with men much less aware of issues relating to gender inequality simply because they aren't exposed to them. As there are more men than women at the senior levels in the sector's companies the people deciding things like salaries, promotions and progression routes are more likely to be men. As a result, unconscious gender bias seems to dictate that the same old systems are being stuck to, reinforcing historical inequalities. Simply put, the fact that 'it's always been this way' is preventing progress.
Findings from our research suggest that almost two thirds of men (60%) think men and women are treated equally when it comes to progression opportunities and remuneration, this is the experience of less than half of women (43%). Men are twice as bullish as women about salary expectations and are more likely to push for - and get - pay rises.
Our white paper, Making the finance sector add up for women, sets out further research findings along with practical recommendations for sector organisations of all sizes who want to redress the balance whilst reaping the business benefits. With so much pressure on the finance sector to operate more transparently, avoid a future financial crisis and help lead the UK into prosperity, can your organisation afford not to take action?Suggest a correction