Creating a fairer Britain
When the Equal Pay Act was introduced 40 years ago it heralded a new era in equality. However, four decades on, a gender pay gap still persists across the economy. In few industries are the inequalities as stark as that of the Finance Sector. Despite women and men making up equal proportions of the finance workforce, women earn significantly less on average than their male colleagues.
The Commission has unique powers to investigate inequality within organisations and has used these powers to look at the extent of the gender pay gap within the Finance Sector, the causes and potential solutions.
We initiated an Inquiry into sex discrimination and unequal pay in the financial services sector in 2009. Our findings about the marked and persistent sex discrimination, which permeates the industry, are set out in our Inquiry and research reports.
Our follow-up report set outs our conclusions about the steps finance sector companies need to take to tackle gender inequality and the pay gap. In this short concluding report we concentrate on three key themes:
The report’s recommendations are being put forward on the basis not only that their adoption across the sector will reduce gender inequalities, but that they will also make a positive contribution to the running of the business.
The first part of our Inquiry revealed that women in the finance sector working full-time earned up to 55 per cent less annual average gross salary than their male colleagues. This compared to the economy-wide gender pay gap of 28 per cent.
The next phase has taken a detailed look into the pay, policies and practices of 44 organisations employing the equivalent to 22.6 per cent of the workforce in the sector. This has revealed that bonuses are a significant factor behind the gender pay gap within the organisations with men receiving five times the performance pay of women, an average of £14,554 in annual performance related pay compared to the female average of £2,875 (based on full-time equivalent earnings).
Significantly, our Inquiry found that no improvements appear to have been made. Responses to our questionnaire showed that women in new jobs were still on average receiving lower salaries than men. The high proportion of workers in the 25-39 age group - the age at which employees tend to have children - also makes it harder for women to have a viable career in the sector that balances family life.
The report highlights how a lack of transparency over pay and working conditions, direct discrimination, long working hours and the difficulties faced by those with caring responsibilities all contribute towards the significant difference between what men and women earn.
The inquiry has delivered a number of key recommendations. These include to:
Download the Financial Services Inquiry Report to read full details