Following extra pressure reviewing gender inequalities when it comes to pay, the Government is calling on financial services employers to sign up to a Women in Finance charter, which seeks to promote gender diversity through four key pledges:
•Having one member of the firm's senior executive team who is responsible and accountable for gender diversity and inclusion
•Setting internal targets for gender diversity within the company's senior management
•Publishing progress annually against these targets in reports on their website
•Having an intention to ensure the pay of the senior executive team is linked to delivery against these internal targets on gender diversity.
The charter has continued the recent focus on the persistent gender pay gap, which naturally was especially in the spotlight during the most recent International Women's Day on March 8. In the finance industry in particular, the issue is prescient as women are heavily under-represented at senior levels. They make up only 34% of managers in the sector, and just 11% of corporate managers/senior executives in banking, according to a recent ILM report. This inevitably has its own knock-on effect on pay, with the AAT's own salary survey, researching its accountancy and finance membership last year, showing that there was an 18% gap between the salaries of male and female full-time workers - a gap that widened to 23% for more senior members.
But following this new charter alone may not be enough for financial services firms who are looking to close the gender gap. It's so important for employers to treat their staff equally, but also for female employees to have the confidence to ensure they are properly remunerated for their work.Our latest research has revealed that men working in finance are far more bullish about their salary expectations, seeking an average of some £12,000 more than they are currently earning, whereas women want an average of just over half that amount (£7,000).
And men are far more likely to ask - and get - a pay rise of some description, even if it doesn't reach their overall salary expectations. Over one in four men working in finance (26%) asked their employer for a rise over the past year, compared to just 18% of women. Conversely, some 61% of women in finance told our survey that they have never requested a pay rise, a figure that falls to just 54% of men. Nearly half of the men we surveyed (47%) secured a pay rise for themselves over the last year - again a figure that falls to 40% for women.
Of course, there will be many women in finance who feel comfortable with both their current role and salary, and they will neither pursue the opportunity to put some more pennies in their monthly payslip or indeed chase a promotion. But others may still be victims of unconscious gender bias in the workplace, perhaps lacking the confidence to seek what they may in fact be worth.
The onus therefore doesn't just lie with companies to encourage gender diversification - but for employees as well, of both sexes. It is of course going to be easier for those women who hold strong relationships with their direct line manager to raise the subject of pay, but all managers should certainly be taking their request into consideration - while senior management should give thought to whether the salaries of their female employees are keeping pace with male counterparts.
Women need to be encouraged to feel more empowered to redress the balance and ensure they are receiving fair recompense for the hours they put in at the office. The finance sector needs to consider equality and diversity in more depth if it is to continue to attract the best talent.
Our white paper, Making the finance sector add up for women, sets out many of our research findings along with practical recommendations for organisations of all sizes who wish 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?