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City salaries: how badly is finance failing on women's pay?

Exact data on representation mean that for the first time we can pinpoint how and where the City is failing on gender equality

The relative scarcity of women at the higher echelons of the City has been obvious for as long as workplace gender equality has existed as a concept.

It is only with the state-mandated release of exact data on representation that we can quantify exactly how scarce however, and how deep the second order effects of this disparity – such as a genuinely shocking gender divide in relative earning power - run.

Many businesses have yet to report and the sample of wealth managers to post their numbers so far remains too small to build a legitimate analysis of the sub-sector. But taking a sample of the wider finance industry reveals how far it remains not just from a gender balance, but even from the limited progress made by the rest of British industry

This data was compiled in the early part of this week so it was not possible to include some of the most recent disclosures by firms such as Jupiter or Hermes. Read on for more   

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The relative scarcity of women at the higher echelons of the City has been obvious for as long as workplace gender equality has existed as a concept.

It is only with the state-mandated release of exact data on representation that we can quantify exactly how scarce however, and how deep the second order effects of this disparity – such as a genuinely shocking gender divide in relative earning power - run.

Many businesses have yet to report and the sample of wealth managers to post their numbers so far remains too small to build a legitimate analysis of the sub-sector. But taking a sample of the wider finance industry reveals how far it remains not just from a gender balance, but even from the limited progress made by the rest of British industry

This data was compiled in the early part of this week so it was not possible to include some of the most recent disclosures by firms such as Jupiter or Hermes. Read on for more   

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The City has a gender promotion problem: women are largely excluded from the top tier of management.

The above illustrates the percentage of men and women employed in the top quartile of finance earnings: men outnumber women by an average ratio of almost two to one.

More than just equality as an abstract concept – although that in itself is highly important – this has a range of secondary considerations from visibility, to mentorship, to the distorting effect of a mono-culture of decision makers.

Without some external push such as the recent Women in Finance Charter, it is also likely to be at least partially self-reinforcing.   

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This is not, however, a recruitment issue. Women are in fact over-represented in the lowest quartile pay grades. They are just not promoted through the ranks, or being recruited into higher pay grades from outside the industry.

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The gender drag is consistent across the pay tiers, with women over-represented in the bottom decile of pay and under-represented in the top. Particular attention is due to Brewin’s under representation – which the company has acknowledged and pledged to correct – and Franklin Templeton for doing someway better than the sector average.

Nationwide the finance industry is again doing significantly worse than the UK average of 54% of lower quartile jobs, and 40.9% of top quartile roles, held by women.

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While under representation has a broad spectrum of consequences it is most immediately reflected in a deep disparity in economic power.

Women’s mean earnings in the finance sector are 31% lower than those of their male colleagues, a spread more than three times wider than the 10.6% national average.

Note that the businesses with the widest spreads between mean – which more acurately finds the centre of a cluster of results – and the median is likely to be reflective of extreme outliers. Given the nature of finance sector pay grades, it seems probable these are at the top end of the scale, especially given they are widest in the high street banks, with long tails of relatively lower paid staff.

Where the spread is narrowest - such as at Brewins and Aberdeen – it is likely to be most reflective of the experience of average employees.

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There is no significant difference in the number of male and female staff employed in bonus-earning positions, which would seem to rebut gender-based claims about any difference in the relative appeal of specific roles.

Awards being equally granted between genders also suggests there is no intrinsic difference in performance due to roles being tailored to male biases.

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But the gender polarities in pay tiers means that the actual awards taken home are even more unequal than those regular salaries.

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