There’s been a great deal of work on diversity and gender pay gap by various bodies over the last few years, and the City is at the forefront of it. It may also be of interest that in 2012 McKinsey & Company found that “companies with diverse executive boards enjoy significantly higher earnings and returns on equity”. So what’s been going on and how could it improve your business or team?

As of 2017 employers with 250 staff or more must publish and report figures about their gender pay gap. According to gov.co.uk the gender pay gap is the difference between the average earnings of men and women, expressed relative to men’s earnings. For example “women earn 15% less than men per hour”. Employers must both publish the information on their public facing website and also report data to the government online using the gender pay gap reporting service.

In addition to the above, in July 2016 a number of City firms signed up to the Women in Finance Charter, which was launched by HM Treasury in response to the review of women in finance by Jayne-Anne Gadhia, which found that in UK financial services female representation was around 23% on Boards, but only 14% on Executive Committees. To date, there’s circa 122 signatories who employ between them half a million people. The Charter commits firms to linking the remuneration packages of their executive teams to gender diversity targets and it also asks firms to set internal targets for gender diversity, and to appoint a senior executive to be responsible for diversity and inclusion.

There are so many theories as to why female representation has been so small, and hopefully this drive by firms to indentify and address the problem will lead to more balance in boardrooms and workforces. As an aside, in my 17 years in financial services recruitment I can’t think of one instance where a client has offered someone less money based on gender, although I suspect in many cases any differential may manifest itself with bonuses and lack of promotion opportunities once somebody has joined a firm. However, there is no doubting a problem exists in mobility and it will be interesting to see when the gender pay figures are published if there is an industry wide problem. However, the UK, and in particular the financial services industry, should be commended for being one of the first movers on this challenging debate.

What is interesting is that so far this seems to have only been adopted by relatively large firms who are probably better resourced to manage the additional requirements reporting entails. Given McKinsey’s findings perhaps a lot of small and medium sized business should focus more on diversity to improve their business performance.

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