According to PayScale, on average, women earn 78¢ for every $1 earned by men. That means the gender pay gap is still at 22% going into 2018.
When we look at finance and technology specifically, this figure becomes much higher.
In the UK, major banks and other employers are required by law to disclose their gender pay gap statistics. From the reported figures it is evident that there are still some ways to go if we are to achieve equal pay among sexes.
Credit Suisse reported that women are paid 29% less than men on a median hourly
The figures, however, don’t necessarily show men and women are being paid different salaries for the same job (which is illegal), but rather the unbalanced composition of senior roles, skewing heavily towards men.
Peter Goerke, senior human resource officer at Credit Suisse said, "The root cause for what we see here is really the high proportion of men in senior and high-paying roles", adding that women made up just 14% of managing directors globally as of the end of 2017. Their aim is to push this up to 18% by 2021 and increase the proportion of woman at director level to 27%. Although an improvement, this is still far from the ideal 50/50 split.
On the other hand, Lloyd’s, Barclays and RBS have all reported that women are paid at least 35% less than their male counterparts.
The issue persists in technology startups, where it was reported that in 2016, female-led tech companies received around $1.5 billion in VC funding, while male-led tech companies received $58 billion in comparison.
Some companies in the tech space have also been very candid about their gender pay gap statistics to highlight the urgency of the issue (even though they were not necessarily required to make these figures public).
Starling Bank reported that female employees earn 48.9% less than male staff while Atom Bank reported a 31.6% gap. Monzo reported that 77% of well-paid technical roles at the challenger bank are filled by men.
It would be naïve to think that the pay gap is an isolated issue, confined to only a few sectors or even a small number of countries. It’s a global problem.
At the high end of the spectrum, you’ve got Korea (36.65%), Estonia (26.60%) and Japan (25.87%). On the opposite end, you’ve got Luxembourg (4.97%), Italy (5.56%), and Belgium (5.91%).
What is eye-opening is the fact that there is not one country in the world where the gender pay gap is 0%.
In recent history, the gap decreased substantially. A study of over 60 countries showed the gap falling in the 1960s to the 1990s from 65% to 30%, due to an increase in the pay of women in the labor market.
But the decrease in the gap has slowed substantially in recent years, with some experts citing discrimination and ineffective government policies as the cause. A few estimates put the final gap closure anywhere from 100 to 150 years in the future at current rates.
The gender pay gap is a complex issue of the global society we live in and to think that there would be a hard and fast rule to fix it would be even more naïve.
However, as we can see from the above companies, great steps can be made towards closing the gap through acknowledgment and transparency.
Acknowledge that there is a problem, that way it won’t just be swept under the carpet. And by being transparent about the size of the issue, companies can be held accountable for future progress.
We know that businesses are not usually driven by moral obligations or progressive ideas but by profit, so education also has a big role to play.
Helene Panzarino, of Rainmaking Colab (theme based innovation program for FinTech markets), points out that “We now have proof that having women in a business from the top down has a positive financial, creative, and market impact. Diversity in my own team sets the best example and putting the women forward for advancement roles, high profile projects, speaking and mentoring opportunities enriches not only their professional lives but the lives of women and men who they influence and support.”
A 2016 study done by EY and the Peterson Institute for International Economics found that having at least 30% of women in leadership positions can add as much as 6% to net profit margins. As businesses start to see the benefits of having a diverse workforce, the number of women in leadership positions will increase.
Finally, fine-tuning outdated recruitment processes is a small step that all organizations can afford to employ with the possibility of making huge strides to closing the pay gap.
On the other hand, Dan Atkinson, chief people officer at Tandem stated, “‘Our principle is simply - best person for the job – however, you
Over at Starlin Bank, all management is required to undergo sensitivity training so as to avoid bias in their recruitment processes.
Although the gender pay gap is still big in the finance and tech sectors specifically, it would seem that these industries are also the ones looking for innovative solutions to the problem.
An example is Curo Compensation, led by Angela Williams, who designed a product to identify and tackle gender pay gap discrepancies within organizations.
“The product, known as CuroGPG, is a chance for firms to not only report on their
But as we mentioned before, it’s a complicated issue which can often throw up controversial and conflicting data.
For companies that already have an even number of men vs women in management positions, increasing the number of women can actually accentuate the gap, still in favor of men.
A study done in Australia found that organizations with 80% or more women in management positions the pay gap increased from 8% to 17%. As the author of the study Professor Rebecca Cassells says “The theory is that when there are very few men in a female-dominated environment, the value of those men increases due to their rarity”.
However, the study also found that “when there was a change in the female leadership team by 10% or more in a single year, making the gender balance more equitable, the organization-wide gender pay gap reduced by three percent or more”.
This result goes a long way towards showing that if we ever want to solve the Pay Gap, we need to reach for true equality in representation among the sexes in organizations, especially in senior, management, and leadership roles.