April 2018 saw the deadline for the new gender pay reporting regulations pass, and it is clear that there is still some way to go before there is pay parity between the genders. In 2010, the European Commission officially named gender balance as a priority on its political agenda. Yet, eight years on, it is questionable whether this is a reality in the UK’s financial sector. Meanwhile, the Financial Conduct Authority has recently called on the sector to work harder to address issues around diversity and misconduct. How is the sector responding to the growing focus by regulators, government and the media on the wide spectrum of issues related to gender?
At a macro level, international regulatory and government bodies have been attempting to create equal opportunities and minimise the number of women out of work
Does the gender pay gap reveal all?
Those working in financial services, particularly women, have long suspected a wage gap between the genders. The recent UK gender pay reports, however, have quantified this suspicion. In January this year, the Financial Times reported that financial services stood second only to construction as the sectors reporting the largest pay gaps, based on those companies that had published figures to date. Alongside the UK’s legislative efforts, Germany has similarly introduced schemes to promote transparency in wage structures. However, the results demonstrate that while sentiment may have changed and some legislative efforts been made, the reality is still far from ideal. Beyond the UK, only 25 percent of board members of the largest publicly listed companies in the EU are women. This does, however, mark a significant increase from 11.9 percent in 2010. In fact, France is the only country within the EU that has over 40 percent of women on boards. It seems women in business across the world are less likely to reach senior positions, which partly amounts for the increasingly reported pay gap.
What can be done to promote diversity in a corporate world?
Senior business executives must stimulate change through leading by example. As specialist recruiters to the sector, we at aim to model best practice and focus on the candidates with the best skill sets and potential to perform in roles, rather than allowing unconscious bias to creep in. An approach we recently took when engaging with a financial institution regarding equality was to analyse their advertising campaigns, which highlighted an alarming lack of diversity. Conducting an external image audit allows an organisation to identify the misalignment between the diverse professional environment they are striving for and the image they are presenting to the public, and consequently realign their external image to mirror their commitment to a diverse workplace.
At a macro level, international regulatory and government bodies have been attempting to create equal opportunities and minimise the number of women out of work, with schemes such as the EU’s package of policies that promote a work-life balance for parents. Countries such as Malta and Denmark are adopting incentive programs to encourage fathers to use parental leave schemes. These legislative efforts can, however, only go so far. Diversity must be created and supported from within each organisation.
Stepping forward with communication
Recent momentum demonstrates that cultures that inhibit diversity are being proactively tackled. The #MeToo movement and UK’s gender pay gap reporting requirements have brought sexual harassment and wage inequality into the media and regulatory spotlight. To be most effective, though, change must be driven from the bottom up. We have seen the most successful results for creating a diverse workplace come from organisations that communicate their targets, objectives and vision effectively. Where firms have a clear vision of the kind of workplace they want to be, and communicate that successfully – both internally and to external consultants – measures like gender quotas and reporting targets become less necessary and change naturally follows.
A look to the future: leading by example
In my experience, the majority of individuals working in the sector are respectful of their peers and are focused on the job. Change is happening, and we know that diversity in business is a recipe for commercial success: the sector is moving in the right direction. Taking stock of the last few years within the financial services sector, it is clear that successful organisations will capitalise on the current momentum to secure fairer, more diverse workplaces, seek to drive change from within and lead by example.