Female employees in some of the UK’s leading finance organisations receive around 80% less in performance-related pay than male colleagues, according to the Equality and Human Rights Commission’s (EHRC) Finance Sector Inquiry.
The report also found nearly all women taking up new jobs in the companies surveyed earn lower average starting salaries than male colleagues. The sector’s age profile may be a factor, with an unusually high proportion of staff aged between 25-39 years – the age at which women often have childcare responsibilities.
The commission’s findings also included:
- Women employees earned an average of £2,875 in annual performance-related pay compared to an average of £14,554 for men – a gender pay gap of 80%.
- A gap in annual basic pay between women and men of 39%. However, this gender pay gap rises to 47% for annual total earnings when performance related pay, bonuses and overtime are taken into account.
- Among the organisations which responded, women received significantly lower performance-related pay on average than men in 94% of cases.
- In 86% of responses to the commission, women who had started their jobs in the last two-and-a-half years had lower starting salaries on average than men starting in the same period
- Significant ‘in-grade’ gender pay gaps in at least half of all job grades/categories, where men and women are assumed to be doing the same or equivalent work, were found in 63% of cases.
- Less than half of cases report making some effort to address the pay gap
- Only 23% of cases report they have undertaken an equal pay audit.
Overall, the finance sector has one of the largest gender pay gaps in the UK economy, with full-time female employees earning 55% less annual gross salary than male colleagues. This compares to a pay gap of 28% for the economy generally.
Trevor Phillips, chair of the EHRC, said: “The financial sector has the potential to play a central role in Britain’s recovery. But it has to address this shocking disparity of rewards. For business to thrive in the new economy it simply cannot afford to recruit and reward in the way it has done in the past.
“By bringing down arbitrary barriers, and changing practices that, intentionally or not, inhibit women’s success, financial firms have the chance to boost morale, bring on new talent, and maximise the potential of their existing employees.
“I am encouraged by the firms which are developing transparent pay policies and flexible approaches to work. But there are not enough of them. At a time when potential employees and customers value transparency and fair treatment, it is clear the enlightened few have a competitive advantage.'”