Jump to content
  • Luuk Jacobs
    Luuk Jacobs

    Sign in to follow this  

    What effect will the Gender Pay Gap legislation have?

    Spring 2017 saw the introduction of a new and significant form of reporting on the Gender Pay Gap which will have wider implications for the evolution of the workplace and workforce.

     

    The new legislation requires employers with 250 or more employees to publish statutory calculations every year showing how large the pay gap is between their male and female employees independent of position. As a result, this will have a positive knock on effect of increasing gender equality in senior positions.

     

    Equal Pay and Gender Pay Gap

    First, don’t be confused about these two terms; Equal Pay and Gender Pay, they mean two very different things. Equal pay deals with the pay differences between individuals who do the same or similar jobs, or work of equal value. It’s unlawful to pay people unequally because they are a man or a woman therefore companies should ensure there is absolute equal pay for equal position.

     

    The gender pay gap however shows the differences in the average pay between all men and women in a company. If a workplace has a particularly high gender pay gap, this indicates there may be a number of inequality issues to deal with, and the individual calculations may help to identify what those issues are.

     

    Where are we now?

    The current UK gender pay gap is 18.1% and is at its lowest level ever (Justine Greening, UK minister for women and equalities). There is however a significant difference in industries and for example the figure for financial services is 39.5% (Elexica March 30, 2017).

     

    Before however jumping to conclusions, let’s try to understand how the calculations work.  The base calculations are:

    • the hourly pay rates of all male full-pay relevant employees divided by the number of male full-pay employees and the same number for female full-pay relevant employees (ie the mean)
    • equally from the above data, the difference between the midpoints in the ranges of men’s and women’s pay (ie the median)

     

    You can reach the final figure by calculating the difference between the male and female pay, divided by the male pay and multiply it by 100.

     

    Put simply, if in an Asset Management firm, there are 10 female secretaries earning £10 per hour and 10 male fund managers earning £25 per hour, there is a mean pay gap of 60%. For Asset Management this figure is likely to be even higher for the bonus mean.

     

    What happens next?

    With the first official reporting due in April 2018, when companies publish their data and narrative, the possible course of action they will commit to in order to make the gender pay gap smaller will make very interesting reading.

     

    As we’ve already stated, equal pay for equal positions is bound by law, so it follows the main attribute of the gender pay gap is the way it highlights the unequal distribution of men and women in senior positions. Within the regulation, companies have the opportunity to further explain in a narrative the main reasons for the gender pay gap and this is likely to confirm this view.

     

    How do we solve this inequality?

    We are seeing an increasing number of women in senior positions through either (equal or even fast track) career progression or actively hiring women in more senior positions. With the last not a real macro solution as it would only reduce the pay gap in one company at the cost of the other.

     

    Research has already shown that career progression of women is often cut short by parental leave, care for parents as well as children (www.ILO.org “Women at Work, trends 2016”). So there need to be other elements tackled in parallel, and outside of the workplace, to ensure that women progress to higher paid (more senior) positions. Some solutions supporting this would be a comprehensive approach to harmonise work and family responsibilities by way of the introduction of (the legal possibility of) shared parental leave, free childcare either through government or companies direct and flexible working arrangements.

     

    What does the future hold?

    The Women’s Business Council has stated that by equalising the economic participation rates of men and women, the UK would add 10% to the size of the economy by 2030.

     

    What is not clear is the roadmap we need to take to reach this goal. It will be several years before the impact of the Gender Pay Gap reporting regulation becomes truly visible, what the key drivers for change are and also which companies are leading the charge.

     

    There is no doubt these leaders of change and reform will also be the most attractive to a changing (millennial) work force and it will be interesting to see what measures they take. The gender pay gap, or should we say “gender equality”, raises a further question on the increasing diversity of the workforce. In the next wave of regulation, should this reporting be extended to for example ethnicity, age, marital status or even sexuality? And would companies be willing to show this without regulation or at a minimum be willing to discuss it in the Board room?

     

    Only time will tell, but the first slew of reports published next year will reveal a reality which has been long hidden and hopefully shine a light on the road towards evolution in the workplace.



    Sign in to follow this  

    Share this  

    Member Feedback



    Recommended Comments

    There are no comments to display.

    Become a member to read more and join the discussion

    Members can read and contribute to discussions

    Apply

    Register now for free access.

    Create your account

    Sign in

    Already a member? Sign in here.

    Sign In Now

  • Our picks

    • FSTP LLP in partnership with AlgoMe invite you to a lunchtime round table discussion on the most pressing issues in today’s industry; digital skills shortage and the apprenticeship levy
       
      Introducing your hosts:
      FSTP LLP, a Main Provider for Apprenticeships offering Financial Services, Leadership and Management Apprenticeships, will be on hand to share insights and experience AlgoMe, the community for the Investment Management industry, connecting professionals from Asset Managers, Wealth Managers and FinTechs with their wider industry ecosystem will be on hand to discuss skills and transformation in the industry  
      The event:
      12.30 - 12.50
      Your co-hosts Rob Carter and Andy Milner, AlgoMe will give an overview of demand for retraining and tech skills, based on the latest AlgoMe report; The Disrupted Career: FinTech, Innovation and The Future Of Careers In Investment Management Followed by Philippa Grocott and Nicola Spennati from FSTP LLP, will give an overview of opportunities for using the apprenticeship levy and how to do so effectively within the industry sector 12.50 – 14.00 Group discussion over lunch
       
      Attendance is limited and on a first come first serve basis. Please contact andy.milner@algome.com if you would like to attend.
        • Like
      • 0 replies
    • The Disrupted Career
       
      Welcome To The AlgoMe Report On FinTech, Innovation And The Future Of Careers In Investment Management
       
      This report aims to address key questions that are important to everyone working in or looking to join the Investment Management Industry.
       
      How significant will the impact of FinTech be on career paths? How likely is my current role to be affected? Where are the opportunities in this disruption? How can I best position myself for future success?  
      We asked a panel of Investment Industry professionals their views.
       
      The full report is available for download to all AlgoMe Community members. Not already joined? Becoming a member takes less than a minute.
        • Like
      • 0 replies
    • With the decorations up, the last order date for Amazon nigh and most of us looking forward to at least a few days break, it’s always a good time to take stock of what’s been achieved over the last 12 months.
       
      For AlgoMe this has been another exciting year.
       
      January started in style with the launch of the AlgoMe Careers mobile app – giving professionals the opportunity to find their next career opportunity on the move.
       
      Then in July we released our Industry Pulse Report – a check on what the industry was thinking about key topics such as Brexit, Pay Gap Reporting, MiFiD II and GDPR. Unfortunately it seems that the uncertainty that the industry was feeling due to Brexit is unlikely to have receded in the intervening period, but it’s good to see progress starting to be made in other areas such as gender and diversity.
       
      In September we launched AlgoMe Community – a place for the Investment / Asset Management industry to come together, providing professionals with ways to grow their knowledge, profile and network. We’d like to say a big thank you to all of the members that have joined and contributed and look forward to continuing growth in 2019.
       
      In November AlgoMe joined the Investment Association, becoming a Fintech member and working closely with Velocity, the Association’s new Fintech accelerator. This is a really exciting initiative and we’re looking forward to doing more with Velocity in the near future.
       
      We also launched our Mentoring matching service in November – designed to help AlgoMe Community members connect with the best individuals within the community to help them to reach their career goals using a simple but intelligent process. If you haven’t already signed up to be a mentor or a mentee, please do spend 5 minutes now and tick off a New Year’s Resolution early.
       
      As we go into the end of the year, we have also launched our survey on Investment Management, Fintech and the future of careers. The impact of Fintech on the industry is going to accelerate rapidly in 2019, but what has been less well documented is the impact on individuals, their careers and the skills they’ll need to succeed in a more digitised environment. We really value the input of our community members, so please spend a couple of minutes filling out the survey and we’ll make sure you’re the first to hear the results early next year.
       
      From me and the AlgoMe team, I wish you all a very happy holiday season and look forward to another year of exciting announcements and change in 2019.
       
      Rob
       
        • Like
      • 0 replies
    • I have always struggled to see a fair reason why employers should be allowed to ask about a potential hire’s current remuneration, other than to give them an advantage in pay negotiations.
      It’s something which can only exacerbate existing pay inequalities and  it’s abolishment can surely only be a positive thing.
      Here the Guardian argues specifically about its impact with regards to the gender pay gap:
      https://www.theguardian.com/commentisfree/2018/aug/23/gender-pay-gap-current-salary-question
      I believe this has already been outlawed in some US states?
      @Jonathan Max - would be interesting to hear the view from HR. 
      • 10 replies
    • The Investment Association recently gave the industry a boost when it announced the launch of Velocity, its FinTech accelerator.  Designed to identify, develop and accelerate best in class firms with innovative solutions, Velocity will champion and facilitate the wider adoption of technology across the industry.
       
      And AlgoMe will be involved in this too, which is why I’m excited to announce we are now a member organisation of the Investment Association as an official FinTech member and have been named a "company to watch" by Velocity.
       
      Challenging Times
      The Investment Management industry faces major challenges and opportunities from forces such as digital technology, pressure on fees and increased regulation, while at the same time there are widespread changes in the workforce and their expectations.
       
      To date, Investment Management has both been fairly insulated from the challenges posed by agile FinTech competitors, but also distant from the opportunities offered by the new technologies and ways of thinking that such companies bring.
       
      Bringing FinTech closer
      Velocity is a fantastic step towards accelerating the adoption of FinTech. It has received support and endorsements from both inside and outside the industry, including from the Chancellor of the Exchequer, Phillip Hammond, who was enthusiastic about the initiative at a recent City event.
       
      To drive change and innovation, the industry needs to connect across different disciplines and areas of expertise, driving new ways of thinking and fostering cultural change.
       
      Without the benefit of emerging FinTechs and their external expertise, it will be hard for incumbents to harness the benefits of emerging technologies such as Straight Through deal Processing (STP), Distributed Ledger Technology (DLT), and Artificial Intelligence (AI) in areas such as risk and compliance, securities trading and investment decision making.
       
      Our Mission
      AlgoMe's mission is to connect the Investment Management industry and empower professionals to manage their careers. Our new product, AlgoMe Community, is placed to become the hub for the discussion between FinTechs and the companies and professionals in the wider Investment Management ecosystem.
       
      Join AlgoMe Community today
       
      AlgoMe Community - community.algome.com
        • Like
      • 0 replies
  • Related Content

    • Andy Milner
      By Andy Milner
      This year it has been hard to escape Pride season – throughout June and into July there have been events all around the world commemorating the 50th anniversary of the Stonewall riots and the effective start of the fight for equal rights for the LGBT+ community.
       
      The celebration of diversity has gone well and truly mainstream, with companies from PWC and Barclays to Argos and GoPro changing their logos to include a rainbow flag. Marks and Spencers are even pushing a new “LGBT” sandwich, adding guacamole to the classic bacon, lettuce and tomato combo.
       
      Our industry is also in on the action, with the Investment Association and Schroders amongst the organisations that are showing their support via updated logos.
       

       
      Rainbow-washing?
       
      Is this public outpouring of support for the LGBT+ community merely a sign of corporations attempting to “diversity-wash” their images, or reflective of deeper changes in their attitudes and approaches to D&I?
       
      According to Stonewall, 6 in 10 LGBT+ 18-24 year olds are still choosing to hide their sexuality in the workplace, which is perhaps not surprising when 1 in 5 of those who have come out say they have been the target of negative comments or conduct in the workplace.
       
      The Investment Association’s new report Do You Remember the First Time? (the follow up to last year’s Bringing Your Whole Self To Work report) is about coming out and being out in Investment Management and makes for interesting reading.
       
      It highlights practical steps that can be taken to improve the experience of LGBT+ individuals in areas including recruitment, employee on-boarding, workplace policies and people management. It’s also encouraging to read a number of real-world examples of where these are being put into place across the industry.
       
      What definitely feels like a positive change is the growing ground-up movement, supported by a number of Industry initiatives, that has been beginning to push the LGBT+ equality agenda more visibly in the last year or so. In 2019, the City of London has been host to more Pride related events than ever before, from talks and discussion panels, to the raising of the Pride flag over the Guildhall in the run up to London Pride this weekend.
       
      Next week also sees the official launch of InterInvest – an industry wide LGBT+ network with the potential to make a real impact on how LGBT+ professionals surface and tackle the issues they face. This sits alongside LGBT Great, an initiative of the Diversity Project, which has just announced its 50-for-50 list of LGBT+ role models – an important part of the strategy for making LGBT+ professionals feel accepted and comfortable.
       
      All of this suggests cause for optimism. However, we also shouldn’t forget that LGBT+ hate crimes are on the rise in the UK and in other parts of the world as the forces of populism become more prominent.
       
       
      So are these public displays of support just rainbow-washing? The verdict isn’t clear.
       
      Peter Tatchell, a prominent campaigner sees it as a capitalist sell-out of the Pride movement’s principles. However, even if some of the motives are cynical, and it is not a true reflection of real progress, at the very least the increased visibility of the Pride movement helps to further bring the LGBT+ community into the mainstream of public perception.
       
      Here’s to more rainbow logos in 2020.
       
       
      Main photo credit: Matias Altbach 
    • Jonathan Max
      By Jonathan Max
      @Anthony - looked like a fantastic event; well done!
       
      Anthony Guinot posted on LinkedIn
      WWW.LINKEDIN.COM Sign in or join now to see posts like this one and more.
    • Jonathan Max
      By Jonathan Max
      https://www.theia.org/sites/default/files/2019-06/PolicyPaper-June2019.pdf
       
      Really interesting Policy Paper from the IA which certainly highlights the fundamental changes underway across the industry, particularly against a backdrop of increased regulation and technology disruption.
       
      Clearly the 'people' aspect is key, would be great to find out more about the Talent and D&I Strategy @gillian.painter?
       
       
    • Eva Keogan
      By Eva Keogan
      We all want to love our jobs but what if the environment you are working in doesn't love you back? That's something many women are facing daily. Sexism is such an old fashioned concept and it’s really time for it to go, but it still exists.  How can firms stamp it out when it seems to be ubiquitous?
       
      You may have spotted the headlines recently about the Lean In survey which found 60% of male managers are ‘uncomfortable participating in a common work activity with a woman, such as mentoring, working alone, or socialising together’. 
       
      The choice of wording used is a bad start as it immediately puts the man in the role of the victim, with him being the one made to feel ‘uncomfortable’. And the study finds even worse thinking. 
       
      Apparently, senior male professionals are less likely to fraternise with junior females than they are with junior males. This is underpinned by these startling statistics: 
       
      Men are 12x more likely to hesitate to have 1-on-1 meetings with women Men are 9x more likely to hesitate to travel together for work with women Men are 6x more likely to hesitate to have work dinners with women  
      And to top it off, 36% of men say they’ve avoided mentoring or socialising with a woman because they were nervous about how it would look.
       
      If we look at these figures from the other side it becomes even more alarming – women are 12x less likely to get a meeting with a senior manager. Women are 9x less likely to get go on business trips. Women are 6x less like to be invited to work dinners.
       
      Yet this doesn't seem to be a case of fixing one problem and causing another, as 57% of women still report that they’ve experienced some form of sexual harassment in the workplace. 
       
      So what exactly is going on here? It's surely enough to put many women off working in a corporate environment altogether. 

      Data and Facts

      While it’s always difficult to apply generic survey data to a particular industry – especially when it’s a sample size of 2000 and generated in the US – there’s no denying that these issues are global, and that sexism and sexual harassment are still rife in the City of London.
       
      In 2017, the FTfm Women in Asset Management Survey found 70% of women have been the subject of sexism. That’s pretty depressing.
       
      It’s really important for everyone to enjoy work – we work longer hours in the UK than our European counterparts and the City is no exception. But while on the one hand we have diversity drives, returnships and Gender Pay Gap reporting designed to give women and other groups support and reassurance through legislation and behaviour change campaigns, recent stories coming out of the City at large show types of misconduct such as sexism, exploitation and at the very least crass jokes, are by no means going away any time soon. 
       
      The Toxic City?

      News stories around sexism in the City aren't positive at the moment - here are just some which have made the news:
       
      James Conmy and his ‘glazed ring’ comment ended up with him being fired. The Bloomberg exposé The Old Daytime-Drinking, Sexual-Harassing Ways Are Thriving at Lloyd’s  which contributed to the banning of alcohol. Coutts is facing a significant pay out to a female employee of its ‘unspoken culture of sexism’.  In February 2019, the FCA met Nathalie Abildgaard, a former employee of IFM Investors, an Australian investment manager with an office on Gresham Street, to discuss her claim that a senior manager sexually harassed her on a work trip – she has settled out of court this April for a six figure sum.  
      With all of this on the table it’s quite easy to lose faith in change at all but we just can’t give up and go home if we want to see change. 

      Who is responsible?
       
      Organisations themselves are responsible for their own culture but they need more than a gentle nudge. Campaigns such as Women in Finance are pushing for the numbers of women in the industry to increase. 
       
      The Investment Association also has a role to play. It currently campaigns around Diversity & Inclusion as well and while it has written to FTSE 350 companies about diversity it has not been so vocal about sexism in the industry itself – but is this something it should champion or should it tackle broader issues?  The Diversity Project, the campaign set up to promote Diversity & Inclusion in the industry has a broad remit across the diversity spectrum and is a force for good overall but holds no power to enforce rules or regulation.
       
      All the above are working towards change but it is only when there is jeopardy, or high stakes, we will see any kind of radical reform or progress.
       
      Calling out to the FCA
       
      When it comes to any kind of enforcement, the FCA is the only organisation with real teeth and it has stated over the last few months sexual harassment falls within its remit, so perhaps we will start to see some tangible movement on the issue.
       
      Speaking at City and Financial's Women in Finance Summit 2019 this month, Nausicaa Delfas, executive director of international at the FCA, pointed to an increase in non-financial misconduct as a threat to the sector's diversity.
       
      "This type of serious misbehaviour is toxic to a working environment and can lead to bad outcomes for customers, staff, stakeholders and the firm. In our view, tolerance of this sort of misconduct would be a clear example of a driver of unhealthy culture. This area clearly requires management attention and a broader change in the firms’ mindset."
       
      Will this effect change?
       
      First and foremost, we’ve seen little change in the Gender Pay Gap reporting figures so should women expect much else to change? Yes of course women should. 
       
      According to Wealth Manager ‘The FCA has said firms need to demonstrate good practice in purpose, leadership, rewarding and managing people, and governance arrangements.'
       
      With SMCR coming into play in December 2019, company culture is being given increasing importance in the Investment Management sector, and the risk of high profile fines for senior management and directors from the regulator may encourage organisations to stamp out any form of misconduct – sexual or otherwise – more quickly than before.

      Let’s hope 2020 sees a step change in stamping out sexism and misconduct for once and for all and we can all enjoy our jobs, regardless of gender or identity.
    • Luuk Jacobs
      By Luuk Jacobs
      I remember growing up in a small city in the south of the Netherlands. Despite the international reputation of the Netherlands being open, diverse and a melting pot of cultures, my growing up was very much defined by white, Caucasian and countryside culture. Any other cultural aspects of life would come via the TV set with either Dutch programmes or majority soaps from the US or UK. All in all, you can hardly call this cultural diversity.
       
      It started to change when at 18 I went to university, although even that remained very much in the same setting but clearly diversity of thought started to be formed and the background of fellow students was very different from when I grew up. I was in the end the 1st in my family to go to university.
       
      The real significant step towards more cultural diversity came when one day a friend asked me to join for an introduction to AIESEC, a student organisation that was brokering traineeships abroad. By the end of the afternoon I had signed up and a week later filled out all the forms. Suddenly the realisation that I would go for 6 months to live in a country that would be English or German speaking; these were the language I had been exposed to in my study, I would definitely not say that I mastered them. What would this bring me, how would I adjust myself, my life that concentrated around family, sports and study would be turned upside down.
       
      Then the letter came (yes sorry no emails yet in those times) that I was matched to a traineeship in Freiburg in Germany. So, I better upgrade my language skills to survive.
       
      Many years later I know that this change in my life opened a door to me to be exposed to a multi-cultural diversity that I cherish today. I spent the 6 months traineeship in Germany, learned to speak the language fluently (drop me in the sea and I will swim), I got to know many new people that remain friends till today. I however also discovered the love of travelling and meeting new people, speak to them, getting to know new countries and their cultures and most importantly understanding cultural diversity and the beauty of it.
       
      I am very fortunate having built up friendships with literally people from all over the world. We might not see each other every year but luckily social media enables us to stay “in touch” and see what we are all up to. It all culminated in my big wedding day with friends from over 20 countries being present.
       
      Equally important it has given me great skills in my professional environment, listen to others, understanding their cultural diversity, tapping into it and making it an extra value in the solution we create for our client.
       
      Without having stepped out of my comfort zone in my early 20’s and embracing the opportunity to meet people from all walks of life, has, I like to believe, made me the person I am and has enriched my life with the cultural diversity I enjoy every day.
       
      Almost needless to say, the moral of this story is to go out there and discover the beauty of cultural diversity than can be as well just around you (especially in London) or in the many corners of this world.
Debug info for admin:
appcms
modulepages
controllerpage
topics/forum ID31
page ID
PHP user agentCCBot/2.0 (https://commoncrawl.org/faq/)
×

We use cookies to give you the best possible experience. If you continue, we’ll assume you are happy with this. For further information, see our Privacy Policy.