By Eva Keogan
By Luuk Jacobs
By Jonathan Max
By Luuk Jacobs
By Andy Milner
By Luuk Jacobs
The latest Gender Pay Gap figures are not showing a nice picture with minimal shrinking of the overall figure from 9.7% to 9.6%. More than a quarter of companies pay women over 20% less than men based on median hourly pay. Just 1.5% pay male employees 20% less than their female staff.
Only a few companies have made progress and the majority continue to struggle or report even worse data. Especially the Asset Management industry shows a bleak picture.
This data however I believe paints a very black and white picture. We need further analysis and understanding of the underlying trends to be able to design GPG plans. We also need to learn from those companies which have managed to improve the gap and find out what the secret of their success if.
For example, analysis of April 2018 by the Office National Statistics (ONS, below graph base Annual Survey of Hours and Earnings) shows that the GPG for full-time employees between the ages of 18 and 39 years was close to zero, but began to widen for people over the age of 40; would this possibly be due to the fact that women take maternity leave in their thirties and feel the impact of this when returning? We are not sure.
This is where the true challenge lies. Current legislation does not oblige an explanation for the change in GPG or even a summary of how the GPG will be reduced. Neither is there a penalty for certain GPG levels or when the gap is worsening instead of improving. The hope was and is that this reporting will create certain self-regulation but now we are in this second year of reporting and it seems to be just a box-ticking exercise.
Nevertheless, various reasons for the existence of the pay gap are well understood, with some directly related with work
Many jobs traditionally done by women are lower paid A lack of genuine flexibility for employees at work Too few good quality part-time jobs
There are many other reasons which are not direct related to work and are more about caring responsibilities, with women still undertaking the majority of child or elderly care, reducing the participation of women in the workplace (either permanent or for a certain time). Some argue this to be a choice, however the Equalities and Human Rights Commission found that one in nine pregnant women had been let go from their jobs or treated so poorly they felt they had to leave. Equally lower participation of women (in general or in specific industries) itself is no reason for a GPG; the GPG would be zero if this lower participation would still result in an equivalent percentage of women then men in all positions and with equal pay for seniority.
Equally there is an increasing number of women who are self-employed (for reasons possibly related to the GPG or the reasons of its existence) and although not part of the GPG reporting statistics, also face the pay gap in this area.
More specific reasons for the GPG are the fact that the top jobs in most companies are still held by men (less than 30% of Board members are female and only 5% of the FTSE100 has a female CEO). Not only have these positions in general the highest pay but remuneration of these positions is accompanied by significant incentives and bonuses.
For Asset Management this is even further exuberated by Fund Managers having sometimes equal or higher pay than board members, whereas the number of women in these positions are few.
On the positive side in some cases a widening GPG might mean progress, as women are hired or promoted in entry level more senior jobs; this will initially widen the GPG before they move up the ranks and start reducing the GPG. Unfortunately, the GPG reporting does not show this.
So, what is the solution to reduce the GPG and ensure women will more equally participate in all level jobs and receive equal pay?
The direct improvements that can be made are well known
Reducing unconscious bias in recruitment Improve retention Offering more flexible working opportunities Encouraging shared parental leave Increasing support for women returning to work
Iceland even goes as far as implementing a rating of job positions on among others, “physical strain” and “responsibility”. If two employees doing a job with the same score and are not being paid the same, the company has to fix it.
I believe however that we should be looking beyond this and start influencing for example the role of men and women in family life, household and society; as long as women continue to take the caring responsibilities, their participation and likely career progression will for some time stall (as for any longer leave taken by men or women). In the current environment of technological change and innovation certain skillsets become fast redundant or less important and “catching up” will even be more challenging.
If we accept the choice of women (and their spouses!) to (temporarily) take the responsibility for caring roles we should equally encourage:
To stay connected with the work environment, while fulfilling these caring roles, by ongoing training and part-time participation ie make it an integral part of parental leave; To oblige companies to provide training during (parental/caring) leave ensuring that upon return the skillset remains suitable for the position in which the woman returns (and leave can’t be an excuse for career stalling or even worse redundancy); To make parental leave by definition shared, yes controversial but by ruling that parental leave is only so long as it is taken by each parent equally, would change the dynamic (and choice).
An alternative route could be to make GPG part of the ESG score of a company. As long as the weighting would be significant, this would definitely be focussing the minds of the Board and Executives, as their investment attractiveness would worsen with the height of the GPG. Even better it would open the dialogue and the need for creating GPG plans (if it is not written down it does not exist). ESG has taken a long time to get the right attention but equally has brought the focus that was needed to make improvements. Something that GPG would fare well by. LGIM has taken a brave step in voting at AGM’s against Board appointments for failing to boost the number of women in their boardrooms.
I strongly believe we need to move away from just looking at the numbers if we want to create lasting change and just creating new policy is not doing it. We must challenge the traditional role of men and women in society, not just with regards to caring roles but also for example education. Just beating the drum will not move the dial but longer lasting (forced) dialogue through routes such as ESG, could push the boundaries.
We need to look beyond the parameters of the report and move outside of the box as a matter of urgency otherwise we will still talk about the gaps in ten or fifteen years and just say ‘nothing has changed much’.
By Eva Keogan
This year’s Gender Pay Gap reports are now largely in the public domain. Financial Services and Investment Management is showing a very wide gap, if not wider than before. Much of the impact of this is being lost in the chaos of Brexit right now. Let’s hope 2020 see us in better shape, but first let’s look at what is driving the debate.
There are a lot of column inches and clever graphics dedicated to the Gender Pay Gap in the media and the comment section on the myriad articles is lively to say the least. The majority of men seem to say equal pay is law and the Gender Pay Gap reporting is misleading. According to the male contingent, it’s complicated, messy, requires counter intuitive thinking and reasoning, does not on the surface appear logical, so it’s not fit for purpose.
Gender Pay Gap reporting has been designed to eke out gender imbalance in the workplace by highlighting the way women take on roles which pay less. This is quite worrying, especially since women reach the same level of education.
Equal Pay in law is still not working. There are also many instances of ‘equal pay’ not being honoured – you have only to look at the recent BBC scandal to see it writ large.
And this is what we’re up against as women in the workforce – legislation is now in place but it’s not being accepted or acted upon.
Interestingly, I think this paragraph from Grazia, a fashion and lifestyle magazine, sums it all up rather well from the female perspective.
What does the future hold for the new generation?
If there is no flexibility or new room made to accommodate gender and diversity, where are we headed? Here are some of my thoughts on what’s to come
Change is going to happen: The ‘glass ceiling’ is still very much in existence but the workplace is destined to change. The Women in Finance Charter is creating progress. New regulation and law will ensure progress (unless it is revoked, which in the UK is extremely unlikely). One hindrance maybe the withdrawal of the UK from the EU which sets us apart from the rulebook we currently abide by. Whatever happens, change is the norm but it’s not going to be quick.
Jobs for the girls: While we are seeing more working women and mothers, I think we will continue to see a reduction in women who want primarily to be home makers and steer away from careers. Changes to the education agenda and generations of women who have had successful careers will normalise careers and family. 2018 ONS figures show a marked change in data which support this.
The employment rate for mothers was 74.0% in April to June 2018, which has increased from 68.9% in 2013 and from 61.9% in 1996 (when comparable records began). Since 2010, the employment rate for women with children has remained higher than for women without dependent children, whilst the employment rate for fathers has consistently been higher than for men without dependent children. 5 in 10 (50.5%) mothers work 30 or more hours in their usual working week (excluding overtime) compared with almost 7 in 10 (69.7%)women without dependent children. In April to June 2018, almost three-quarters (72.5%) of families with couple parents had both parents in employment; of these families, almost half (45.5%) had both parents in full-time employment.
Women will champion themselves: There are networking groups and awards specifically set up for women in the City. However, at various milestones, women have extremely different needs in the workplace. Gender specific issues such as breastfeeding, menopause and other previously taboo subjects are on the agenda for the workplace now and the conversation needs to continue so there is a supportive environment. This will probably embody itself in female only forums and discrete problem solving groups rather than large campaigns.
Disruption is on its way: Like it or not, with a growing workforce of highly educated women the status quo will be challenged, and it will be down to two developments. First, new technologies such as AI which are set to replace menial roles – which women are filling more than men - will lead to retraining and up-skilling. These will likely be new roles which are client facing or project managing technology.
Second, as companies such as Tesco, Oracle and Google are facing class action from women due to pay and discrimination, it is highly likely to follow in the Investment Management industry, possibly on a global rather than local level. This will no doubt go back decades rather than years and will not be pleasant either.
Fragmentation in the market: As women become more of a power in the workforce, it’s quite likely they will want to work on their own terms. This will more likely mean they will not want to work in prevalently male environments which do not accommodate them, their growing families and pressures on work life balance. Technology has changed the need to be present in the office and virtual teams are acceptable. Network marketing and franchises are quite popular for women with families who work outside the industry – this proven model would be interesting to apply to Investment Management, so expect to see micro businesses which will be small teams and even the resurgence of the family firm.
While the 2019 Gender Pay Gap is not showing much progress today, it is early days. Equal pay and bonuses will continue to dominate the Investment Management career agenda and the broader world of work. I think we will see activist shareholders push for fair and equal conditions for all, including all other groups in the diversity spectrum as well, but that’s another story.
By Andrew Pullman
Over the last decade, the All Blacks rugby team have epitomised high performance, their win rate is around 95%, they are without a doubt the iconic market leader.
Much has been written about the All Blacks culture and how it might be applied to business. Sport teams only have to perform for short match periods, they have time to train and rehearse before they execute. In the commercial world, you are always on the pitch and there is not a bench of substitutes. So, what can we in business learn from the high performing culture that the All Blacks have built? Below are some key tenets of the All Blacks culture.
High Performance is the combination of Capability and Behaviours. You need to focus on creating and maintaining, under pressure, the right culture to allow winning behaviours. People can have the right skills but need to apply them in the right way. People will rise to the challenge if they own the challenge. Everyone needs to take ownership. Pass the ball, as a leader pass responsibility on. Ask the right inclusive questions of your team and they will feel empowered to respond more positively. No egos. No one is bigger than the organisation. Select, promote and retain people for their values not just experience. Disruptive influencers need to change or be changed. Better people make better All Blacks. Yet again select carefully, you can develop specialist skills to meet your business needs, you can develop and train your people but you can’t fundamentally change a person’s character. Your values need to be more than words, you must bring them to life with genuine behaviours. Leave the All Blacks jersey in a better place. Talking about leaving a legacy in your business is much easier if you are a shareholder, so it is crucial to effectively engage your employees with your brand through: a clear purpose, authentic values, a shared vision and a transparent strategy.
There are many more great examples of high performance, team and leadership behaviours to be learnt from the All Blacks. If you want to find out more about how we can help you create a high performing culture please contact us at People Risk Solutions.
This article was contributed via People Risk Solutions by Richard Watts, a leadership and strategy consultant. He has spent over a decade helping global businesses build high performing cultures with a focus on operational effectiveness. He honed his leadership skills as a senior operational leader in the Royal Marines, a high performing organisation which was based on liveable enduring values.
By Pierre-Yves Rahari
You must have come across the numerous articles about Bill Gross' retirement. I was lucky enough to be associated for a long period with the investment organisation he founded, PIMCO, and work under his leadership - and that of many other outstanding PIMCO Partners and colleagues (which the articles seems to forget to mention). So I am reading these articles with much interest ... and emotion. What I find interesting is how today's press seems to be respectful of the leader and investor he has been, relating his ups-and-downs (there were much of both in his life and career) in quite a fair manner, without too strong a bias. I like that. It makes Bill Gross appear more human than how used to be portrayed (and venerated) in the past. Even if, clearly, he will make it to the Pantheon of great investors ...
Who else would you see join Bill Gross in that Pantheon of great leaders or investors in the asset management industry?
By Luuk Jacobs
Worth looking at the video in this article. Yes it shows the facts but equally it only confirms what we already know. It would in my view been equally or more powerful to turn the tables and let the men feel what it means to be held back in the climb up ....... maybe then the change would be quicker