Why pay, diversity and inclusion matter.
Hilary Cooper from the Finance Foundation shares her thoughts from our Future of Banking Diversity Event.
4th September Panel event: Future of Banking – Why pay, diversity and inclusion matter.
A 6am start and I was on the train to take part in the Chartered Banker Institute breakfast diversity event. Hosted by PwC and introduced by Phillippa O’Connor, their Reward and Employment Partner, I joined the line-up of panellists for a trawl through the issues, all expertly chaired by the Institute’s Chief Operating Officer, Joanne Murphy. Although, the principal focus of this meeting was around gender pay gap reporting, it was noted that a recent House of Commons Business, Energy and Industrial Strategy (BEIS) Committee had recommended to extend reporting to ethnicity and disability by 2020, so these were other areas that businesses should be preparing for.
We began by acknowledging the dismal record of financial services on gender pay equality – the worst performance of any sector with a pay gap twice the national average, measuring 36% when taking median hourly earnings across the whole economy, or 22% according to the recent gender reporting exercise restricted to larger employers.
Earlier this year I had published a report with the Chartered Banker Institute based on a survey of members’ views on progression, pay and pay transparency. Although that study found members to be positive in general about women’s progression opportunities, there were also concerns about cultural/behavioural issues that can block women, including the long hours culture, lack of flexibility in working patterns, and a very strong view that unconscious bias and promotion through male dominated networks was a problem. Where this is combined with a lack of transparency in some roles over pay and how pay increases are awarded women can be further excluded simply by not knowing what pay they could or should be negotiating for. Tackling unconscious bias and lack of transparency through clear, objective processes around recruitment and pay, as well as acting to ensure fair systems for assessing performance and considering people for promotion were all considered vital by the panel, along with holding managers to account for gender balance in these decisions.
Virgin Money’s Director of Public Affairs, Emily Cox, MBE, talked about the drive in Virgin Money to tackle the gender pay gap by increasing the numbers of women in senior roles but also by challenging the low proportion of men in less senior, customer-focused positions. Digging beneath the surface they had found unconscious bias negatively affecting the recruitment of men into these roles – something now being addressed as part of a drive to improve gender balance throughout the company, so that people are served by a frontline team more representative of the customer base. As for the recruitment of senior women, Emily raised the interesting point that head hunters may opt for the easy option and not properly seek out a more diverse short list of candidates – something Virgin Money continues to challenge, with good results, but again showing the need for absolute vigilance over process and practice.
Jon Terry, PwC’s UK Diversity and Inclusion Consulting Leader, cited evidence that diversity is now central to how millennials view potential employers – with 85% stating that diversity and inclusion is a key consideration. Both he and Emily said that gender pay gap reporting has succeeding in turning the spotlight on employers, with their next steps being closely watched, and women and men prepared to move on from employers who do nothing to improve.
In concluding the discussion, all agreed that changing the dial on gender means changing the tone from the top. The Women in Finance Charter, pioneered by Virgin Money’s Chief Executive, Jayne-Anne Gadhia, offers a blueprint for this: appointing a senior executive to lead on diversity, setting and reporting on targets and holding managers to account for delivery. As Jon also stressed, it is absolutely crucial that organisations position progress on diversity as a business issue, not a siloed HR issue, and resource and evaluate it accordingly. It will, after all, increasingly be how they are judged by customers and employees alike.