Earlier this year, the gender pay gap hit the headlines as British employers with at least 250 staff were given until 4 April 2018 to report the difference between what they pay their male and female employees. But, with only months to go until next year’s deadline, are things moving quickly enough?
When it comes to the financial services sector, there is certainly a long way to go. According to data from SJD Accountancy, cited by Financial Reporter
’s Rozi Jones, “women in a permanent financial services role are paid, on average, 28% less than men for the same job”. The same research shows that gender pay gaps for jobs in the UK reach a staggering 49% (£15,000).
“The gender pay gap has been a topic of increasing conversation,” says Derek Kelly, CEO at SJD Accountancy, who is quoted by Jones. “Putting the difference in salary into real terms has been shocking.”
And the impact of the pay gap goes far beyond the workplace, especially for the younger generation. With things such as housing affordability becoming a real issue – figures from the Institute for Fiscal Studies show that 40% of young people struggle to afford a house deposit – the pay gap is having a genuine effect “not only on employees, but their families and long-term prospects”, adds Kelly.
Financial Reporter article
Changing employer attitudes
The problem also extends to further up the ladder. Citing figures from recruiting firm Global Accounting Network, Business Matters
reports that male financial directors earn around £30,000 more, on average, than women in the same roles.
Data from the Office for National Statistics also highlights massive disparity. Women account for 42% of financial manager and director jobs in the UK, but they earn 31.6% less than their male counterparts. With men taking home an average of £71,986 per year, women earn just £42,674 for the same job.
Global Accounting Network believes the “unnecessary focus on existing salary when negotiating remuneration as professionals climb the career ladder” is partly to blame for the huge difference in pay.
“Females are statistically more likely to take career breaks to care for family,” says Adrian O’Conner, founding director at Global Accounting Network, quoted by Business Matters
. “When these professionals return to work, the institutional practice of basing new job offers on incremental increases on their previous salary can prevent them from catching up as quickly as they perhaps should – if at all.”
According to O’Conner, it is the responsibility of employers to review current recruiting and career progression practices – and this starts with the interview process. “‘If employers continue to ask current salary the cycle will never be broken, and even companies that are non-discriminatory can be unconsciously perpetuating the gap.”
Business Matters article
Steps in the right direction
HireRight’s Dawn Hirsch, writing for Business Insider Australia
, also believes the attitudes of employers must change. According to Hirsch, women are facing a lose-lose situation, being benchmarked against their previous salary if they do disclose it, or being penalised if they refuse to provide the information.
Research from US firm PayScale shows that women who decline to disclose their salary history are paid around 1.8% less than women who share it, while men are paid around 1.2% more in the same situation.
To tackle these issues, there are several things that companies can do to help close the pay gap. HireRight suggests that employers take the following actions: avoid questions about salary history, and judge candidates solely on their ability to do the job; set a salary range for the job itself, not an individual; ask candidates what their salary expectations are at the start of the hiring process to make sure they are affordable; and be transparent about salary brackets and how decisions regarding pay are made across the company.
The fact that inequality is “systemic” is one of the greatest barriers to closing the pay gap, says Hirsch. But campaigns such as #MeToo and #TimesUp – movements against sexual harassment and sexual assault – have brought women’s rights to the forefront of the public agenda. “There’s a renewed sense of global solidarity,” adds Hirsch.
However, with the World Economic Forum predicting that it will take over 200 years to close the pay gap, action must be taken sooner and with greater momentum.
Business Insider Australia article
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