International Women’s Day always prompts discussions about the gender pay gap. This is the disparity in average earnings between men and women. It refers to unequal access to higher-paying positions, resulting in a lack of opportunity for certain groups of people.
On March 8th, expect to see discussions on pay gaps, bias, and discrimination in workplaces and society increase. Sadly, there is often little progress. In 2023, the UK saw its gender pay gap in financial services reach its highest level among all sectors at 22.7%. This is only a marginal improvement of less than 0.3% from the previous year. In the finance sector specifically, women are at a significant disadvantage. They face a “double the wage disparity” compared to the UK average. In the US, despite efforts, the gender pay gap has “barely closed in two decades.” Comparing data from 2022 to 2002, American women earned 82 cents for every dollar earned by men. This is only slightly increased from the 80 cents recorded 20 years earlier.
Some companies are demonstrating meaningful efforts towards achieving equality. Here are examples of fintech companies that have actively taken steps to eliminate gender pay gaps.
Move on from why
Trier Bryant is a previous Chief People Officer and founder a People/HR consulting firm with experience in Fintech, Tech, Wall Street, and the military. She noted that the firms that make the most progress are those where human capital management leaders know why diversity is essential. Typically, people can spend “80% of their time talking” about why pay parity is vital and never enough on the change itself. When you know the research and “link business goals to DEI and how it strengthens your commercial potential,” you spend more time on the actions. In her experience, this is the “starting point: without it, no change program will succeed.” With it, she has been part of the most successful campaigns for equity.
Treat the request fairly
Tiama Hanson Drury is the Chief Product Officer at Minna Technologies. She describes herself as a “beast negotiator” owing to her background in sales. She often heard stories of her female colleagues being denied their salary requests for reasons she couldn’t understand. She decided to be part of the transformation towards fair treatment. Tiama has set up processes, procedures and parameters to drive fair pay. She dedicates time to mentoring and creating programs for managers. This helps them behave objectively in the review process.
Move away from percentages
Sarah Häger, CCO of Enable Banking, spoke of several examples of change. She says if you wish to erase gender pay gaps across your business, you must have a “firm and long-term perspective” on the process. One case study included “halting salary” increases on the “highest earner salaries” until the others were up to parity. In another example, she said they moved from “percentual to absolute terms” within pay rise conversations. In many organizations discussing a salary increase based on a percentage uptick is customary. When considering percentages only, it was too easy to increase the gap further and overlook inequalities.
Review and reset
Yaiza Luengo, believes that it is important to “correct the mistakes of the past.” She has served as the COO for large multinational financial service firms for two decades. She suggests that firms should take “edge cases” out of regular compensation discussions. They should be addressed separately through re-benchmarking and proper review. According to her, managers need to adopt a more open and honest approach towards fixing the gaps that shouldn’t exist.
Be transparent
Businesses that prioritize transparency in their payroll system are less likely to have pay gaps. Sherree Tibbs is the Director of Operations at Fundipedia, and they use pay bandings. She says this makes it possible to achieve transparent pay across the entire organization. Adding, “It can work if you choose to make it work” and opt not to make exceptions. She says you must ensure that each team knows the job descriptions, expectations and the equivalent pay bandings.
The future demands it
EY and Stefanie Coleman, Principal for workforce advisory, who is focussed on financial services have produced reports on the future of work. They say businesses need to “embrace radical transparency” to stay competitive. In her research, she has found that Gen Z, who have grown up “digital technology-enabled,” expect to have access to real-time information. This includes compensation data and comparisons to what others are earning. This means that businesses must be willing to be open and transparent about such matters to attract and retain the best talent. Those who understand this are paving the way for reducing the gender pay gap.
As the fervor of March fades, crucial questions remain. Who will take concrete steps to implement these strategies within their organizations? and who will merely engage in discussions without meaningful action? The answer to this question will determine the trajectory of progress in addressing the gender pay gap beyond one day.
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