FILE PHOTO: Jayne-Anne Gadhia, when Chief Executive of Virgin Money, speaking at the Confederation of British Industry (CBI) annual conference in London, Britain November 9, 2015. REUTERS/Toby Melville/File Photo
April 5, 2019
By Carolyn Cohn and Lawrence White
LONDON (Reuters) – Major financial services firms in Britain have made very little progress in narrowing the gap between male and female pay and more than a third have gone backwards, a Reuters analysis of gender pay data shows.
Financial firms have on average reduced pay disparities by just over half a percentage point in the last year, the analysis of 89 of the biggest companies showed, highlighting the lack of progress in the sector with the worst average pay gap in Britain.
The poor figures come despite finance companies publicizing a raft of initiatives to close the gap, from hiring more women in senior roles to mandating mixed gender shortlists and promoting flexible working.
Pay disparities in Britain have come under the spotlight since the government forced businesses to submit gender pay gap figures annually from last year.
The data shows the difference between average hourly male and female pay, and tends to reflect the smaller number of women at senior levels, where financial services firms have a poor record.
Reuters surveyed 89 major banks, asset managers, hedge funds, insurers and other financial services firms in Britain, including all the FTSE 100 and FTSE 250 financial services firms that had reported gender pay data by Thursday.
On average, the firms showed a narrowing in the mean gender pay gap of just 0.6 percentage points compared with a year earlier, the survey showed.
For a graphic on UK financial sector gender pay gap, see – https://tmsnrt.rs/2I3vy6C
For an interactive version of the graphic, click here https://tmsnrt.rs/2HYgZkH.
Jayne-Anne Gadhia, the former chief executive of Virgin Money, who runs the government-backed Women in Finance charter, criticized finance firms for not doing enough.
“Businesses need to realize that they will not succeed unless they embrace diversity as a key driver of results and growth,” she said.
“They need to focus on it, measure it, set targets and hold senior executives accountable for making progress – year in year out.”
Virgin Money – which was bought by rival CYBG last year – had itself faced criticism for reporting a wide gender pay gap of 32.5 percent for 2017. The bank narrowed the gap to 29.7 percent last year.
Only three firms had a gender pay gap below last year’s mean national average.
Fifteen of the 48 major British, U.S. and other international banks surveyed reported a widening in the gender pay gap of their UK employees, and 32 of all the firms did so.
Firms with more than 250 employees in Britain had until April 5 to submit gender pay data, the second year of this government requirement.
The overall mean hourly gender pay gap based on employers who reported in 2018 was 14.3 percent, according to government data, but that widened to 30 percent for the financial sector according to an Investment Association (IA) study published this week.
In addition to a “motherhood penalty” and behavioral biases, the IA said that in financial services, there were “limitations in real meritocracy”.
HSBC had the biggest gender pay gap of the companies surveyed, at 61 percent, a widening of two percentage points from a year ago.
“We are committed to improving our gender balance and recognize that this will require sustained focus over the long-term,” the bank said in a statement.
It added it was taking a number of specific steps, including an “aspirational target” for 30 percent of senior leadership roles to be filled by women by 2020. On this measure, it said it had progressed from 22 percent in 2012 to 28.2 percent at the end of 2018.
Within some of the companies looked at, individual operating units performed particularly badly.
Across all the firms surveyed, State Street Global Advisors, the asset management arm of custody bank State Street, showed a year-on-year widening in the pay gap of 13.9 percentage points. The overall bank, though, saw a 0.1 percentage point reduction.
“While we have made significant on-going efforts to improve, we recognize that there is much more work to be done,” a spokeswoman for State Street said.
FTSE 100 asset manager Hargreaves Lansdown was most successful in narrowing its pay gap, more than halving it to 13.7 percent from 28.8 percent, which the firm attributed to hiring more women in its third to sixth tiers of seniority although it noted its median gap rose.
Consumer credit firm Provident Financial’s home credit division had the smallest gender pay gap, at 4.9 percent.
(Reporting by Carolyn Cohn, Lawrence White, Simon Jessop, Maiya Keidan, Iain Withers and Sinead Cruise; Editing by Mark Potter)