Gender diversity in the workplace has been a hot topic for many years now. With growing interest in movements such as #MeToo, even more scrutiny is being placed on equality and fair treatment at work regardless of gender. This includes looking at unbalanced aspects of the working world, such as under-representation of women in senior roles and the gender pay gap, where women find they are being paid less than men for working in the same position.
Finance: An Optimistic Outlook
In the financial services industry, which is typically one of the most male-dominated sectors, executives are for perhaps the first time ever expressing optimism when it comes to gender diversity. While there may be little evidence of progress when we look at the statistics, the fact remains that top level executives and leaders of human resources are now arguing that the results will soon be seen.
Joey Horn has held several senior roles in the financial sector; for example, between 1994 and 1996 she was Vice President of Mergers & Acquisitions at Credit Suisse First Boston. However, over 20 years later only 27.2% (weighted average) of top jobs in the industry are held by women according to data from 2018. Some more workplace gender diversity statistics can be seen in the embedded infographic.
Catalysts for change include the #MeToo movement, which has led to improvements in making many workplaces less hostile for women, as well as the new government requirement to publicly report on the gender pay gap by publishing male and female earnings within each company.
Mandated Gender Pay Gap Reporting
Mandated gender pay gap reporting in the UK is now in its second year. The figures in these early stages show little to no progress, and opinions are mixed as to the effectiveness of the system. While optimistic supporters maintain that this type of reporting provides a highly useful window into pay inequality which will ultimately lead to fairer wages for everyone, detractors say the opposite.
In an Institute of Economic Affairs report issued in April 2019, associate director Katie Andrews writes that the reporting system has the potential to incentivise businesses in the wrong direction. Andrews discusses the possibility that employers, rather than being motivated to hire more senior executive women, may instead be less likely to employ the usual number of women at the lower end of the pay scale, in order to produce figures that round out the gender pay gap. However, others see businesses bringing in more women into entry level roles. This practice will initially increase the gender pay gap but will also open up a pipeline of female talent for the future.
WEC Gender Gap Report
The 2018 Gender Gap Report from the World Economic Forum estimates that it will take more than a century to close the gender pay gap. Even in more progressive countries, women still on average get paid less than men, and the WEC forecasts 108 years for this to change completely. This is despite findings from a World Bank study that shows worldwide closure of the pay gap could increase the global economy by $160 trillion, or nearly double the current GDP of the world.
Studies have also proven that a more diverse workforce creates a more successful and profitable business, driving innovation and resulting in better business decision-making. Some countries, beginning with Norway in 2003, have begun to introduce mandates regarding female representation at senior level. However, the results of policies such as this are as yet fairly inconclusive.
Despite the continuing gender pay gap, reports suggest that women are generally happier in their work than men. You can find out more in the embedded short video.