The City has found itself under scrutiny again after an inquiry by the Equality and Human Rights Commission found that women in the UK’s leading finance companies receive a whopping 80% less in performance-related pay than their male counterparts. What’s more, the Commission said that overall, women typically earn less than half of men's pay in financial companies. The authors are putting this down to recruitment patterns further ‘entrenching’ the gender pay gap whereas EHRC boss Trevor Phillips reckons the UK is just ‘culturally sexist’. The evidence is certainly striking…
The study, which includes data from 50 companies employing almost a quarter of the total workforce in the financial services sector, shows that the average man working can expect to earn a rather tasty £14,554 in bonuses. On the other hand, the average female can expect to earn only £2,875 in performance-related pay – not to be sniffed at, admittedly, but it might well leave a few of them with a slightly bitter after-taste. This only serves to further widen an already great pay divide in the sector – men in finance can expect to be paid 47% more than women when it comes to total earnings.
The report’s authors came up with a couple of reasons for the ever-widening pay divide. They reckon that the sector’s ‘age profile’ may be a big factor blocking women’s success: an unusually high proportion of workers in financial services fall into the 25-39 age group – the age at which women tend to have childcare responsibilities. The report also cites lack of awareness about starting salaries as another potential contributor to the gap.
Whatever the cause, it’s clear that the country’s financial institutions are unlikely to hang onto their most talented female employees if they continue to treat pay equality with such disdain.
But although 80% is clearly an unacceptable difference, we do think Phillip’s accusations are a bit broad-brush. There’s certainly a case for labelling the City ‘culturally sexist’ on the basis of these findings, but the survey is far too narrow to tell us much about the state of gender equality in the rest of UK plc.
The survey is also unlikely to go down well with those who have been campaigning for more female city bosses, to reduce the danger of another testosterone-fuelled bubble. But, trying as we always do to look on the bright side, judging by these figures any bank that does sign up loads more female employees will certainly make a big saving on its bonus bill….