It’s an unforgiving undressing of some harsh home truths, particularly within the financial services sector, and, of course, the media are on hand to cover it all. Indeed, there were over 2,000 articles published on the topic just within pan-European asset management titles and UK national papers in 2018 alone.
Some commentators have also highlighted the hypocrisy of firms who campaign and lobby for greater governance and diversity at the firms in which they invest, while their own figures are lagging behind the national average. This is a significant issue; in 2018 Reuters’ analysis found a mean average salary gap of 30.2% and mean gender bonus gap of 66.5% in asset and wealth management companies. Compare this with the overall UK firm figures which showed a mean average salary gap of 14.5% and a mean gender bonus gap of 15.1%.
So where are we now on International Women’s Day 2019? In short, it’s a mixed bag. There have been some improvements year-on-year, with a number of prominent firms reporting figures remaining stable, though others have reported a slight increase in its mean average salary gap.
The figures don’t, however, need to put asset managers or other financial services firms on the defensive. Below are three elements that are required in effective communications around the gender pay gap:
1. Understand and contextualise the figures
Examining a gender pay gap is just one way of looking at the pay discrepancy, and looks at the difference between the average earnings of men and women. Equal pay, however, examines the pay of men and women doing the same or similar work. Both have their value, but measure two very different things. There are also a number of various legitimate factors that might affect the balance of this gender pay gap: the ratio of men to women at different seniority levels, for example.
One asset manager noted that in order to promote greater equality, they had made a conscious effort to hire more women in entry-level roles, with the intention of empowering them to be promoted upwards. However, this resulted in a negative skewing of the figures with more women now earning less.
Context is everything in these situations and explaining the reasons behind such a situation can go a long way to supporting a business’ brand.
2. Set out your commitments for change
Let’s be honest; no one in financial services came out of last year’s gender pay gap reporting season with perfect figures. What the reporting made abundantly clear is the sheer scale of the challenge ahead in order to reach greater equality.
However, this does present an opportunity to demonstrate real leadership. As with wider ESG considerations, the discussion has moved past asking whether the industry should be doing something to change this to asking ourselves the best way to close the gap. Is it greater collaboration? Introducing hiring quotas? Implementing initiatives that encourage and enable older women to return to work? Or something else? The jury is still out, but addressing the way forward for a business is crucial in how its figures are communicated and how that message is received.
3. Be genuine
The gender pay gap isn’t a PR issue; it’s a business issue. And so, being a driver for change involves making fundamental changes to the way a business operates. The industry doesn’t need half-hearted ‘me too’ vanity projects, or empty promises; what is required is a real intention to promote positive change. That being said, setting unrealistic goals or vague targets will be met with scepticism and contempt, like that which has been seen in the reception to ‘greenwashed’ products. What the industry requires is for businesses to set out a clear agenda for what the figures mean, and what it intends to do about them, then action it.
The gender pay gap isn’t a problem than can be solved overnight, and indeed is expected to take several years, if not decades. That being said, effective communications and having honest discourse around these figures is a good starting point in holding the industry as a whole accountable. With media coverage on the gender pay gap spiking rapidly over the last five years, there is no longer room to hide or remain stagnant on the issue.