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Diversity in finance needs to start from the top

The gap between men and women in senior positions has been the focus of high-profile conversations and widespread media coverage for the best part of 2019 and rightfully has bought the issue of gender imbalance to the forefront of British employees, companies and, government.

The most recent gender pay data reveals that there is still a long way to go in achieving parity – with almost eight in ten organisations recording a gender pay gap in the last year. Research conducted by Robert Walters reveals the sectors where these disparities are most prevalent.

Robert Walters spoke with Erica Ingham, Chief Financial Officer at MediaCom North to explore the reasons behind the ongoing gender pay gap, its existence in the finance profession and how women can overcome persisting workplace challenges.

Addressing the diversity gap in finance

“The diversity issue in finance comes at board level, so it’s not necessarily a case of having to encourage more females into the sector. It’s a business challenge, not something that needs to be solved at higher education level as we have pipeline of talented female finance accounting & finance industry ready to thrive in the industry.”

Out of the 9,000 professionals surveyed by Robert Walters, 50% of accounting & finance professionals were male, while 47% were female. However, almost double the proportion of men were in senior positions (63% men v. 34% female), indicating that progression paths for women are not as straightforward. Reinforcing this, 40% of women state that having a “lack of opportunities available to them” is the greatest challenge to reach leadership positions.

“And it’s not just about cracking the glass ceiling and reaching executive level heights. Increasingly, businesses are having to be more transparent about the salaries they offer at board level, and we’re seeing that men and women are not being paid equally for the same role. It’s these injustices that are driving high-profile movements to remedy the gender pay gap.”

According to the official pay gap data, finance and insurance was one of the worst sectors for women to work in with an average gap of 22.9%, meaning a woman earned 77p for every £1 paid to a man. Average bonus pay in the financial sector also reflected a stark gap at 40%.

Championing diversity is a two-way street but what I’ve learned is that seismic change needs to come from the top. Business leaders need to dispel any outdated views of what a Board should look like and avoid recruiting in their own image. 

 

Indeed, the Robert Walters 2020 Salary Survey shows that a CFO is expected to earn between £90-250k in a large enterprise in the UK – what’s the likelihood that the majority of women fall at the lower end of the scale?

Salary negotiation

While it’s clear that changes need to cascade from the top, interestingly, Robert Walters research explores the notion that women’s attitudes towards salary negotiation serve to widen the pay gap.

According to the survey of 9,000 respondents, men are 23% more inclined to negotiate a pay rise with their employer than females. Erica investigates the barriers that dissuade female finance professionals from negotiating their salary:

“It appears that women are less likely to negotiate a raise for multiple reasons, but confidence is the key factor here. Women are more likely to be concerned about how they will be perceived when they are direct and persistent - yet these are some of the traits you need to successfully ask and negotiate for higher compensation.

“Self-esteem can dwindle further due to having lack of close work allies in male-dominated work environments. Lifestyle difference such as an inability to attend out of hours social events can also have an impact.

Flexible working

It seems that flexible working creates a two-fold problem; firstly we see evidence of some employers making employees feel like they should be ‘grateful’ and so in turn feel guilty if they ask for more tailored benefits.  Secondly, employers that aren’t willing to shape roles to employees’ lifestyles inevitably create progression barriers. Erica explains how this has personally affected her career:

“In my personal experience, I have also come across a fear from women that working flexibly do not wish to “rock the boat” and appear ‘ungrateful’ for flexibility offered by their employer.

“The lack of ability to work flexibly has led me to turn down opportunities to progress my career in the past. I think this happens because employment offers are weighted more favourably to males. It is rare that flexible working is mentioned from the outset, and when it is, it doesn’t tend to extend beyond having childcare responsibilities. I think if employers offered flexible working universally, not as a case-by-case basis, it would create a level playing field for professionals to progress without the influence of unconscious bias.

“In recent years I’ve proven how a board-level role can be fulfilled by working flexibly. It’s an important message to give to women who have taken time off and return to work – they shouldn’t feel that their career has backtracked.”

The importance of difference voices

Innovation, productivity and rational decision-making is borne from a team with a mix of viewpoints – Erica advocates that the research should drive the next chapter of the diversity debate:

“While commentary is rampant around the gender pay gap, little media attention is given to the real and immediate benefits that derive from having a variety of perspectives in the same room and why we should be advancing more women and minority groups."

“We know that companies need to do be encouraged to take action, so we need to highlight those examples where a diverse board has reduced groupthink, and, in turn reduced business risk.”

“For example, McKinsey research highlighted a correlation between a diverse board and an increase in profits (when compared to less diverse boards). On top of reporting on the disparity, this is the kind of evidence-base that needs to be put under employers’ noses to bridge the gap.”

“Championing diversity is a two-way street but what I’ve learned is that seismic change needs to come from the top. Business leaders need to dispel any outdated views of what a Board should look like and avoid recruiting in their own image. Instead, the focus needs to be on achieving diversity of thought and skillset. This does not come from having a Board made up of the same types of people with the same backgrounds. In order to make Board appointments attractive to all groups, we need to look at company culture. From a practical level staff wellbeing, flexible working and where and how we advertise positions are key.  Apart from the obvious moral driver, there are several pieces of research prove that diverse Boards are good for business, reducing risk and impacting positively on the bottom line.”

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