The financial sector, where women are paid less, get 80% lower bonuses and face entrenched sexist culture

// 7 September 2009

Women working in leading UK financial companies receive around 80% less in ‘performance related pay’ (ie bonuses) than their male colleagues, a report by the Equality and Human Rights Commission has found.

The report is based on a survey sent to 50 top financial firms – which extends from women working in big City investment firms, to those working in high-street banks. These firms employ 22.6% of workers in this sector. Overall, the sector employs roughly equal numbers of men and women.

The key findings:

  • Women employees earned an average of £2,875 in annual performance related pay compared to an average of £14,554 for men – a gender pay gap of 80 per cent.
  • A gap in annual basic pay between women and men of 39 per cent. However, this gender pay gap rises to 47 per cent for annual total earnings when performance related pay, bonuses and overtime are taken into account.
  • Among the organisations who responded, women received significantly lower performance related pay on average than men in 94 per cent of cases.
  • In 86 per cent of responses to the Commission, women who had started their jobs in the last two-and-a-half years had lower starting salaries on average than men starting in the same period.
  • Significant ‘in-grade’ gender pay gaps in at least half of all job grades/categories, where men and women are assumed to be doing the same or equivalent work, were found in 63 per cent of cases.
  • Less than half of cases report making some effort to address the pay gap
  • Only 23 per cent of cases report that they have undertaken an equal pay audit.
  • As a whole, the finance sector has one of the highest overall gender pay gaps in the UK economy – with women working full-time earning 55 per cent less annual gross salary than men. This compares to a pay gap of 28 per cent for the economy generally.

Is it a surprise? Not that a pay gap exists, perhaps, but the scale of that pay gap should shock. Maybe it will finally shock these companies into action – although to my mind it’s not a good sign that 23% of companies have already undertaken equal pay audits, yet the bonus pay gap persists in 94% of cases, suggesting that even this measure of exposing the inequity in pay packets has not forced change.

Also, it’s striking that in 86% of cases women starting jobs in the last 2.5 years are starting on lower salaries, strongly suggesting that these companies are laying down pay injustice and inequality for decades to come. This should be a statistic to file away for those times when people suggest these problems will just fade away in years to come, and they’re just the holdover from less egalitarian times.

One issue the report highlights is that on-paper policies do not necessarily translate into real-life changes. For example, it includes this quote:

‘There was absolutely no flexibility on the firm’s part to even try to fit in my flexible working request as I was told it was really only for secretaries and not for lawyers or professional people … all the policies on paper were not really put in practice at all but to comply with laws and for appearances sake.’

This has a cost to the company, as well as being drastically unfair:

‘One woman who was denied flexible working was a fantastic sales person, one of the senior sales people in the group and the best producers. They wanted her doing 5am to 7pm Monday to Friday, and even if she could find a childcarer who would work those hours, she wanted to see the child during the week. She asked for reduced hours, five days a week, but she asked to come in at 8am rather than 5am. They said no so she left the industry.’

Also, it’s not just a question of being paid less. Unsurprisingly, in companies where women are paid less than men across the board, other kind of sexist attitudes prevail:

The Inquiry heard compelling evidence that underpinning discriminatory managerial attitudes to women was what many witnesses referred to as a very ‘macho’ or ‘lads’ culture in their workplace. One even referred to it as ‘a boys’ club’. It is this culture that denigrates certain tasks, which then become associated with women’s work, from which men are encouraged to progress so that women become ghettoised, contributing to occupational segregation.

This sex stereotyping of work across the sector was compounded by the sexism that was described by some witnesses as pervading wholesale banking, particularly in relation to client networking. It was noted that clients were often ‘entertained’ in lap-dancing clubs, hostess bars or sport activities such as golf, in which women either felt unable or unwilling to participate or were overtly excluded. As one respondent explained:

‘Every single type of activity, whether it was customer-facing or designed to increase cohesion within the organisation was masculine, and so women seemed to be really excluded from participating in all of the informal and other networking.’

As a consequence of being excluded from these client networking activities, women in these organisations were less likely to be able to cultivate clients in the same way as their male colleagues. This sexism also directly impacted in other ways on women’s capacity to secure higher pay. An incident was reported to the Inquiry in which one woman, who wanted to speak to her manager about possible re-grading, was told by the male manager: ‘If you show up for work in fishnets for the next month then maybe we’ll talk about it.’

It actually gets worse, particularly in regards to attitudes to women with children:

These examples of sexism are a feature of a wider cultural issue in which negative attitudes towards women were commonly reported in financial services organisations. Women, according to these witnesses, were often viewed as ‘a maternity risk’. Male managers were reported as holding negative views about women’s potential or actual childcare responsibilities. Sometimes these views were expressed in overt and shocking terms:

‘… a senior director female who had had two periods of pregnancy, the first period of pregnancy when she came back, someone extremely senior within a global banking institution shouted across the room she should shut her legs and make sure she had no more babies …’

Read the whole report here

The report makes four recommendations:

  • Appointing a board member to set the tone, champion the issues and drive change
  • Incorporating equality and diversity into organisational and individual objectives
  • Undertaking annual equal pay audits and publishing the data
  • Ensuring maternity, paternity and parental support schemes are in place and effective
  • Monitoring the implementation and impact of policy on gender equality

Comments From You

W.A. Holjenns // Posted 7 September 2009 at 11:40 am

Pay gap bad – but, er, isn’t the finance sector itself a lot worse? Whether run by men or women, isn’t the uninhibited pursuit of capital always going to result in a basic variation on patriarchy?

Jess McCabe // Posted 7 September 2009 at 11:47 am

@W.A.Holjenns However much of an anti-capitalist you are, these companies employ more than 1 million people in this country right now. How ever much of an anti-capitalist you are, that doesn’t mean it’s OK IMHO to ignore the blatent sexism and pay inequality in these companies.

And, frankly, however much of an anti-capitalist you are, and however nice it would be to say ‘come the revolution none of this will matter because these companies won’t exist’, in reality right now it’s not realistic to say banks or financial companies are just going to cease to exist. So, frankly, yeah, sure, when I read shit like this over the weekend, I am totally with you that this is inherantly a messed up industry. But, that’s really another discussion, right?

Madeleine // Posted 7 September 2009 at 12:04 pm

W.A. Holjenns, did you actually even read Jess’s post properly? Did you read all the documented, glaring instances of institutionalized discrimination against women?

If you did and if you still don’t want to see this particular Bigger Picture, that is of course your privileged choice. But I don’t know why you then bother to post obtuse comments on a feminist website.

Toni // Posted 7 September 2009 at 12:35 pm

Jess, I read the link you provided in your reply to W.A. Holjenns. That is appalling.

It would be good to know that, given the fact that the poor bloody taxpayer has just been forced to bail out the financial sector, the government would be determined to impose clean-up-your-act demands which would include measures to deal with the blatant sexism outlined above. But given that Gordon Brown and Alistair Darling are now saying it’s impractical to even cap bonuses….

Well, how many things do I want to get depressed about today!

Claire // Posted 7 September 2009 at 1:43 pm

Fifty-five percent??

Bloody hell.

Feminist Avatar // Posted 7 September 2009 at 2:01 pm

The section on women not being given flexi-time is at least one reason for a legal capping of work hours. The fact is that workers who consistently work long hours are shown to be less productive than those who work within 40 odd hour week structure. Very little more work gets done in the extra time because people are exhausted. So, it’s bad business as well as bad for child-rearing. A legal prohibition on long hours would benefit the entire population, and if the work can’t get done, then employ more staff- also good in a recession.

W.A. Holjenns // Posted 7 September 2009 at 3:31 pm

Certainly idealism should not be used for a cover for inaction, and no, it is silly to set the bar so high no change will ever be effected. But the (idealist?) question of the system itself, I don’t think be neglected in the face of the (material?) reality that women have to work with. Maybe it’s because I’m not a woman, that I tend to want to think about the ways that western life could be improved for everyone, and particularly, how a feminist stance (as opposed to the utterly prevalent patriarchy) could act as a basis. My apologies if my previous post was too blunt, and thankyou to Jess for an illuminating bit of blogging, but I’d just feel happier to see some goals (even, perhaps especially, if ludicrous) mixed in with reporting. On reflection, this seems less and less a place to fight this out, so sorry about that, and thanks for tolerating (I hope) this would-be-former-chauvanist.

Sarah // Posted 7 September 2009 at 3:45 pm

Indeed, having worked a fair few 14 hour days myself (in finance) I completely agree that productivity falls to almost zero, and in addition you tend to end up making mistakes and bad judgements that you wouldn’t have done if you’d been better rested. Working such hours you can’t possibly get a sensible amount of sleep, or eat well, it’s not surprising then that you don’t function well.

But it’s very difficult to refuse to work the hours expected, especially if you don’t have the ‘excuse’ of children, and perceptions and your career progression can suffer. Also ‘everyone else’ is doing it, and no one wants to let the team down or seem to be not pulling their weight. I like the idea of capped hours – I’m aware of the arguments against, but really think the benefits outweight the objections here. It’s so counter to the entire culture and mindset of the City though, I struggle to imagine how it would ever be accepted.

On the original subject, I’m hesitant to jump to outrage, because I think the pay gap is a complex thing with many reasons, and not least from a statistical point of view the figures can be skewed by a few men at the very top receiving truly astronomical bonuses. But yes, it’s a sexist (and homophobic) environment to be sure – I was shocked by how bad it was, for example I was groped by a colleague on my first day on the graduate programme, and have experienced/witnessed many incidents of offensive and inappropriate behaviour and ‘banter’ – and I can’t imagine that doesn’t play a part in maintaining the gap as well.

Jess McCabe // Posted 7 September 2009 at 4:09 pm

@WA Holjenns Feel free to imagine I’ve added a paragraph on how it’s desireably to peacefully dismantle kyriarchy, end national borders, change the way the entire global economic system fuctions, and redistribute capital and natural resources onto everything I write. I think it’d get boring to constantly repeat it though, and would risk decentring the point at hand: in this case the experiences of women working in one of our biggest sectors.

W.A. Holjenns // Posted 7 September 2009 at 4:31 pm

@Jess : I suppose I can imagine a paragraph of the things you list; but I’d be more interested to wonder, if we could have a positively asserted woman’s world, unharrassed by reaction to a man’s world, what sort of sectors would there be, and what would the workplace look like? I can’t imagine that quite so easily, and if that’s because of a gap in my reading I’m sure I’d be grateful for any recommendations.

Lara // Posted 7 September 2009 at 5:57 pm

“The fact is that workers who consistently work long hours are shown to be less productive than those who work within 40 odd hour week structure. Very little more work gets done in the extra time because people are exhausted. ”

Any links to said research? Would be very interested.

Miloronic // Posted 8 September 2009 at 12:10 am

@ W.A.Holjenns: You’re wasting your time. Patriarchy is not a free floating concept; it’s determined by something. Don’t you know that the problem is men, not the ruling classes. Many men are paid less than women in the public sector but as reformism is the agenda of the day and not the total replacement of the system and equality for all. The question why? Is unlikely to be asked.

Feminist Avatar // Posted 8 September 2009 at 2:36 pm

@ Lara: This is not my area of expertise to be honest; but my sister worked on a ‘work – life balance’ research project and assured me this is was the literature said. But a quick google search produced some of the following which might be interesting to you:

For a non-academic source, see:

For discussions of working hours and productivity see:

Dominique Anxo and Arne Bigsten , Working Hours and Productivity in Swedish Manufacturing

The Scandinavian Journal of Economics, Vol. 91, No. 3 (Sep., 1989), pp. 613-619

For the benefits of flexitime on productivity see:

Ralston, Gustafson and Anthony, ‘Employees may love flexitime, but what does it do to the organisation’s productivity’, Journal of applied psychology, 70(2), 1985, pp. 272-279.

EDWARD M. SHEPARD III, THOMAS J. CLIFTON DOUGLAS KRUSE, Flexible Work Hours and Productivity: Some Evidence from the Pharmaceutical Industry, Industrial Relations, 35(1), (2008), pp. 123-139.

There is also quite a large literature on the health concerns of long- working hours, which led to the restriction on hours people use machinery, drive trucks etc- because the impact of their exhaustion was seen as a greater risk to the public than say a banker’s. Given how well the bankers managed the banking system, we might want to rethink this ;)

Philipa // Posted 12 September 2009 at 9:59 pm

I don’t see what there is to debate about- the attitudes, although presented from individual cases, are shocking, just as much as the ridiculous pay gap. The financial sector has always seemed to me to be like any other masculine profession (most high earning careers) – women need to have impossibly thick skin to be a success.

Women don’t just need to be ‘as good as’, they need to be overly charismatic, and then still wear make- up and apologise for their success. This in a society where lots of single mums are trying to provide for whole families – rather than the other way round.

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