That was the message from a committee of MPs last month, which found that the culture within the financial services sector acts as a barrier to the career progression of women and is reinforced by the raw data disclosed by the firms in the first tranche of GPG reporting earlier this year.
Our analysis of that information has found that while positive steps are being taken in the financial services sector to close the GPG, a renewed effort is needed to address a culture that neither rewards performance of, nor encourages progression for, women.
The GPG reporting requirements
The gender pay gap reporting regulations apply to private and voluntary sector employers with 250 or more employees. Public sector employers are subject to a similar duty under separate legislation.
The regulations require employers to publish their overall mean and median pay gaps based on gross hourly pay for men and women, expressed as a percentage; as well as their mean and median gender bonus gaps. They are also required to publish the proportion of male and female employees within each quartile of your pay distribution, ordered from lowest to highest pay, as well as the proportion of both men and women that have been paid a bonus in the preceding 12-month period.
GPG information must be reported annually. The first reports had to cover GPG information as at 5 April 2017, and had to be reported by 4 April 2018. The next reporting period applies to employers' GPG position as at 5 April 2018 and must be reported by 4 April 2019.
Employers are required to publish the information on their own website and also submit it to a portal set up for centralising the data by the government. The submitted data displayed on the government portal is standardised. However, employers can provide a link to more detailed information on their own website. Employers therefore have an opportunity to contextualise the data, place it in its historical context and set out action plans to tackle any problem areas.
The GPG in financial services
Approximately 419 companies have reported their GPG data within the government's financial and insurance activities sector. According to that data, the financial services sector has the second highest GPG of all sectors in the UK, with a median gap of 22.5%. The sector with the largest GPG is construction where the median pay gap is 24%.
The average woman working in the finance sector is paid 27.2% less per hour than the average man.
This sector has seen significant differences in the average mean bonus pay received by female and male employees. Bonuses are often paid to employees in jobs within the top pay quartile which is dominated by men. This higher bonus practice observed for those in senior positions amplifies the gap. On average, bonuses received by female employees are 49.5% lower than their male counterparts.
In the spirit of transparency, some companies within the sector took the opportunity to disclose more information than the GPG legislation requires.
This included examples of regular reviews of pay levels for men and women and links to further statistics which demonstrated the organisation's gender pay gap in each pay quartile.
Significantly, some businesses within the sector, including the big four consultancies KPMG, PWC, EY and Deloitte, published revised gender pay gap figures to include partners. The government guidance on GPG reporting specifically excludes equity partners from those calculations as they are owners of the business who receive a composite profit share representing payment for the job they are doing as well as a return on the equity they have invested in the business rather than a salary or bonus. This means it is not possible to provide a like-for-like gender pay gap comparison.
On that basis these consultancies published a "total earnings gap" based on the salary and bonus of employees together with total earnings for equity partners.
Underlying causes of the GPG in financial services
Women are underrepresented in senior roles within financial services firms and it is those senior roles that attract higher pay.
Nicky Morgan, the MP who chairs the prominent Treasury Select Committee in the House of Commons, highlighted the problem of an 'alpha male culture' at a senior level in organisations in the sector in an article for the Guardian in March. The committee subsequently formalised its concerns about the culture in a report published in June following its Women in Finance inquiry.
This culture was identified as a major deterrent for women in moving into senior positions in firms and is one of the main reasons why women make up just one in four board members of financial services firms and account for just 6% of chief executives active in the sector.
In evidence given to the committee, Jayne-Anne Gadhia, chief executive of Virgin Money, criticised the bonus culture which rewards employees who argue hardest for a bigger award, as well as the culture of valuing presenteeism over outcomes.
The lack of opportunities to work flexibly also contributes to the GPG. Many female employees work within the branch networks in which it is more common to see part time working and job sharing, however these roles are generally lower paid. The committee said more senior men within the financial services sector "should lead by example by working flexibly".
A further issue is that the bonuses received by part time workers negatively affect the GPG calculations as the calculation does not take into account that the employees are not full time.
Signs of change
More than 160 companies have become signatories of the Women in Finance Charter, demonstrating a commitment to increasing the proportion of women in senior management roles from 35-50% by 2020. Among the signatories are Aviva, Barclays Bank, Deloitte, HSBC, Lloyds Banking Group and Legal & General.
A large number of companies have demonstrated a general commitment to improve gender balance in more senior roles. There is a focus on changing the culture within the companies to drive equality in both the workplace and in society in general.
In addition, some firms have developed a pipeline of female leaders through talent management and leadership development schemes. New career opportunities have also been created through the expansion of both graduate and apprenticeship programmes to drive gender diversity.
Unconscious bias has played a part when it comes to recruitment and review processes. For this reason, many employers have chosen to implement mandatory unconscious bias training for managers or, in some cases, all staff members. Some companies have even introduced the use of software to ensure gender neutral job adverts and scrutinise the recruitment process to eliminate such bias.
Organisations are beginning to recognise the importance of encouraging women to return to work following maternity leave or extended career breaks. Many have launched initiatives to target highly skilled women and encourage their return.
Employers are also conducting reviews of various policies, such as shared parental leave and agile working policies to make flexible working easier and more attractive.
Companies are also setting various targets to drive diversity in the workplace. In one example, a bank has taken the innovative step of formally linking senior executives reward to the delivery of their inclusion targets.
The approach UK firms take to addressing the GPG in financial services could be shaped in future by EU policy, despite Brexit.
A European Parliament committee recently proposed that institutions subject to the Capital Requirements Directive regime should be expressly obliged to ensure their remuneration policy is 'gender neutral'.
Although the proposals are far from final, it is possible that the plans could win support from MEPs and be included in new EU legislation that is proposed, and that the UK government could be obliged to implement the legislation before the country formally exits the EU.
Regardless, it is incumbent on financial services firms to ensure their policies and practices actively encourage and support women to progress their careers into senior positions, and that pay awards are fair and free from bias.
Susannah Donaldson is an employment law expert at Pinsent Masons, the law firm behind Out-Law.com.