1 00118601 Emerging themes 2019 A4 AW v31 combined - Page 77

It will come as no surprise that the gender pay gap
within financial services significantly exceeds the
national average. The national median hourly pay gap
reported under the Equality Act 2010 (Gender Pay Gap
Information) Regulations 2017 – more generally known
as the Gender Pay Gap Reporting (GPGR) regulations –
sits at 9.7%. For financial services and insurance firms,
it rises to an average of 22%. The pay gaps published
by some of the larger financial services institutions are
substantially higher still.
No matter how blunt a tool the GPGR regulations are,
they have undoubtedly put an increased spotlight on
diversity in the workplace and have contributed to
greater scrutiny of the issue at board level.
Lessons from the first year
It is trite to say that a gender pay gap is not the same
as an equal pay problem. A large gender pay gap does
not necessarily mean that a firm has discriminatory pay
practises. But even if all staff carrying out the same job
are paid equally, a gender pay gap may suggest issues
within the organisation that need to be tackled.
Virtually all financial services firms attribute their pay
gap to their gender profile and the lack of women in
senior management positions. This is the real issue firms
face. There is no longer any debate (if there ever was)
about whether gender diversity at management level is
a good thing. The challenge now is how gender diversity
within the senior ranks can be achieved and maintained.
Over the last few years, much work has been done within
the sector to try and bring about real cultural change.
The latest figures indicate that 272 firms have signed the
Women in Finance Charter, openly pledging their
commitment to work to build a more balanced and fair
industry. In particular, signatory firms have pledged to
support the progression of women into senior roles by
focusing on the pipeline of talent from which senior
promotions are made.
Each organisation will have its own challenges but any
firm looking to make meaningful progress on this issue
should ensure that it maintains board-level support.
This means the board supporting both diversity in
principle and the policies that will help achieve it,
including embracing working practises that assist
employees balance work with raising a family.
Senior Associate,
Firms have until 4 April 2019 to publish their second
gender pay report. There was significant scrutiny around
the first reporting deadline in April 2018 and there is no
reason to expect this to decrease in the lead up to, and
following, April 2019. There will be pressure on firms to
publish figures that show an improving picture. No one
doubts that tangible change takes time, but by now
firms should have started to put in place measures
to begin to address identified issues.
Some firms may wonder whether there is any advantage
to be had in publishing their second report early and
ahead of the April deadline. Whilst this may enable them
to explain away any lack of meaningful progress since
their first report, it risks being viewed as “gaming the
system”, could be seen as contrary to the spirit of GPGR
and arguably only postpones the issue for future years.
Horizon scanning
Various influential bodies are already calling for gender
pay reporting requirements to be strengthened, not
least where the legislation is perceived to have gaps.
In August 2018, the House of Commons BEIS Committee
published a list of recommended changes which
included requiring all firms with 50+ employees to
report their pay gap (rather than the 250+ threshold
under the current regime) and widening the legislation
to include partners and LLP members. The exemption
of partners from GPGR has been the focus of particular
criticism to date.
At the time of writing, the government has confirmed
it does not intend to make any changes to GPGR in the
short term, so as to give the legislation time to bed
down. The government has also highlighted that many
firms have decided to voluntarily report on matters
which are strictly outside the GPGR, including partner
remuneration. This voluntary reporting is in no small part
due to public pressure and the strength of public opinion
on these issues.
In summary
It is clear that the focus on diversity, from the media,
regulators and the workforce itself, is not going
away any time soon. Firms undoubtedly ignore this
at their peril.
Senior Associate,


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