As revealed in last year’s gender pay gap report mandated by the U.K. government, women earned on average 59 percent less than men at HSBC, Britain’s biggest bank. Fast forward one year, HSBC’s gender pay gap appeared to have expanded to 61 percent. By comparison, Lloyds Banking Group reported a 31.5 percent gap, and across all sectors, the average in the U.K. is closer to 17 percent. As expected, HSBC indicated that the gap could be explained by different factors, including over-representation of women in junior roles (and likewise the abundance of men in senior roles), and more women opting to work part-time.
Working fewer hours have implications far beyond earning less income; women will end up gaining less experience and exposure, which will further inhibit their career trajectory as well as their retirement security. Not only will their savings be reduced, they will also earn less social security income (in the U.S.) or pension benefits due to reduced contributions from shorter earning years. Adding to the challenge is women’s longer lifespan and less availability of financial services targeting women’s needs.
But is it really a lifestyle choice, or is it born out of necessity (i.e. constraints), perhaps due to lack of affordable child care, flexible work arrangements, and outdated cultural norms that women should bear the primary caregiving responsibilities – of children and older parents? Consider a recent example from investment bank BNY Mellon, which attempted to reverse their current flexible working policy due to perceived ability for better collaborations when employees are physically on site during the same office hours. Or the case of UBS, Switzerland’s largest bank, where female employees are suffering from long-term cuts on their bonuses due to maternity leave.
All Talk No Action?
Despite increased awareness of gender equity issues, and commitment by various executives and industry leaders, progress towards equality appeared to have stalled. One does wonder, what are the drivers behind the pay gap in the first place? And what could be done to close it, once and for all? Would mandating quotas be a solution? While some might argue that this could undermine the women joining the board, would this serve to hold business accountable – and show them that promoting diversity is not a box-ticking exercise? Unless women are being appointed into the senior roles (in banking, VC, and tech alike), no substantial changes will occur. And it’s not just about helping women getting into the corner offices either; to achieve sustainable success will require cultural and policy changes to support working parents. Deloitte, for example, is introducing a new policy that allows parents to take 18 weeks of parental leave over 36 months – recognizing that parenting is not something that happens for only 12 months. It takes a village.
As our society ages and we are all living and working longer, we will soon expect five generations of people working alongside each other. What happens when we combine ageism and gender bias? How will older women fare in the workplace as a result? If recent studies are of any indication: according to World Economic Forum, it will take 165 years for North American gender pay gap to close.
Question is, are we willing to wait this long?
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Listen in to our conversation with Catherine Flax, former CEO of Pefin, on our next episode of Shades of Grey on iTunes and Spotify, as we talk about gender and age bias.
Join us May 15th for the inaugural FinTech4Life where we explore the future of financial services for the world’s fastest growing and wealthiest customer segment.