How to read gender pay gap data for finance firms, and what to do about it
There is less than a month to go until UK companies with over 250 employees are obliged by law to publish their gender pay gap data. Whilst some have already reported, the vast majority of relevant companies are still to disclose their figures.
When they do, what do you need to look for?
There are three key reporting requirements
Relevant employers must publish:
• Their median (i.e. middle of the range), as well as their mean (i.e. average), gender pay figures, thereby showing the “typical” pay difference between the sexes within the organisation, in terms of hourly pay and the overall pay gap;
• The proportion of men and women in each quartile of their pay structure, ordered from the lowest to the highest paid; and
• The proportion of men and women who received a bonus during the previous year, and any gap between the sexes’ bonus awards.
What does this tell you as an employee?
The data will not tell you if your workplace environment is discriminatory. However, it may enable you to make a crude assessment as to whether or not it might be, and may help you spot patterns which merit investigation.
If your organisation has recorded a pay gap in favour of men (which many finance firms already have), there are some obvious questions. Firstly, why are men receiving salaries or bonuses which are proportionately higher than those of female colleagues? Secondly, why are women not properly represented at management level? And thirdly, if you are a woman assessing your career prospects, could you use this to your advantage by pushing for promotion?
Depending upon your employer’s responses, you may wish to scrutinize their practices further, submit a grievance, or in some cases, issue proceedings on grounds of sex discrimination or unequal pay. Gender pay gap data, in isolation, is not going to furnish you with an unequal pay or sex discrimination claim. However, it may support any such claims by highlighting trends within a company which indicate poor (and potentially illegal) practices.
What does the data tell you as a prospective recruit?
The most useful exercise will be to compare the gender pay gap reports of your current employer with your prospective employer and those of industry peers. This will enable you to gauge whether or not your target company is promoting gender diversity, is supporting the progression of both genders in the workplace, or is simply paying lip service to these aims.
You may also want to look at what the company has said in any narrative accompanying its data. What plans does it have for addressing any pay gap? How does it intend to encourage women to take up roles at managing director level or equivalent? If the bank of finance firm you want to work for is reporting a significant gender pay gap which is larger than others, is this really a company you want to work for?
Most banks, asset managers, fin tech companies and hedge funds recognize that their data may reflect inconvenient truths about the gender dynamics within their organisation. However, this should be seen by businesses as an opportunity to gain a competitive advantage in the battle to recruit and retain the best (male and female) talent. Gender pay gap data, in and of itself, is unlikely to bring about the cultural shift needed in order to remedy pay disparity between the sexes. However, the public scrutiny of businesses who report significant gender pay gaps just might.
Francesca Lopez is an associate in the employment team at Kingsley Napley LLP
Have a confidential story, tip, or comment you’d like to share? Contact: firstname.lastname@example.org
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)