How employers and business schools are tackling the gender pay gap in the finance industry

Despite being touted as a lucrative career, the financial services industry has one of the largest gender pay gaps out of all sectors. A report published by PwC in March 2022 found that the average pay gap for the financial services market stands at 26.6 percent, more than double than the 12.1 percent seen in the wider UK market.  

We examine what measures are needed, both in the workplace and educational settings, to help create a more level playing field in the finance sector.  

Barriers to career progression 

One of the biggest contributors to the pay gap in most sectors is the motherhood penalty and domestic care that women often take on. Helen Wright is the founder of a recruitment agency, 9-2-3 Jobs, aimed at professionals seeking flexible careers.  

She remembers feeling trapped after trying to get back into the workplace and managing childcare responsibilities alongside work. “When I discovered that I wasn’t going to be earning enough to cover childcare costs, I found it frustrating and demoralising, which led me to start my own recruitment agency.” 

Helen works with many clients, including women who are looking for flexible roles after having children. “I was speaking to someone who held senior positions at one of the Big Four companies and she’s now realised she can’t go back to those same roles because the level of responsibility required of you isn’t something you can easily manage anymore.” 

“I’ve seen a lot of ambitious and successful women who are sat in middle management and they’re not getting any further in their careers. A promotion often comes with the expectation of working long hours, and of course, many women and families don’t want that. Naturally, companies end up losing talent and ambition that experienced women can offer.” 

Embracing flexible working 

Although many companies adopted remote working post-pandemic, the financial sector upholds a reputation of presenteeism over productivity. According to a joint study by the non-profit group Women in Banking and Finance (WIBF) and LSE, workers in financial services often ignore rules on the number of days they should be in the office. The study suggested that women especially preferred flexible working and overly prescriptive quotas on office days deter female staff. 

The president of WIBF, Anna Lane, said: “I expect that those managers who are demanding their workers fulfil a rigid three-, four- or five-day schedule will lose women to their competitors who do not.” 

Helen questions whether employers can think creatively about working patterns that don’t compromise business objectives. “People are moving away from the idea of a nine-to-five and presenteeism, which I think is an enabling move.” 

“Attitudes towards part-time employment in particular can vary depending on company culture and I think a lot of businesses don’t even realise there are lots of experienced professionals who want to work two days a week.” 

Gender stereotypes 

Higher education institutions are recognising their responsibility in challenging stereotypes on subject choice. At NEOMA Business School, the Talent & Careers department work to raise awareness on gender equality in the workplace. In order to gather data on gender equality, the school surveys their graduates every year, including information on their choice of specialisation and salary.  

Vicky Millar, a career consultant in the team, said: “Only 17 percent of our female students are choosing to specialise in finance. It makes a great difference to those entering the financial field where the remuneration level is one of the highest so there is a clear link between the choice of subject and the choice of career.” 

One reason is that they have noticed there are less women going into finance than men and therefore assume that it might be a hostile sector to work in. “It means they’re more likely to choose a different subject and will then reproduce that gender split because they’ve noticed it’s happening already,” Vicky said.  

When the French business school organised a conference to raise awareness on the topic, Isabelle Chevalier, director of the department, was surprised to find that many female students didn’t believe there was a problem.  

She said: “We shared data on the percentage of females choosing to specialise in finance and implications on future earnings, but I was hearing reasons such as ‘I’m not good at mathematics’ or ‘I want to work in luxury marketing,’ reflecting gender stereotypes about subject choice.” 

Overcoming self-censorship 

As well as running workshops to identify any beliefs or stereotypes that might be holding students back, the school’s alumni association, Neoma Wo.Men, also plays a big role in encouraging women to feel confident when entering the workplace.  

Vicky said: “The group is similar to HeForShe in the types of values it has, and it essentially puts a spotlight on successful female graduates and facilitates discussion on issues such as professional equality.” 

They also offer a mentorship programme with female alumni and encourage students to seek coaching opportunities with inspirational women who work in their desired fields.  

“We had a senior HR manager from GEODIS who attended one of the school’s events and reinforced the idea that it is possible to have it all but don’t waste time - negotiate your salary from the start, go for top jobs and keep going. There are compromises to make along the way but it’s about saying to women that you can do both.”