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Gender paygap showslittle signof closing

There is no country on earthwhere women are paid asmuch as men. Around theworld, the International

Labour Organisation estimates thatthe average gender pay gap nowstands at close to 23 per cent, mean-ing that for every £1 men earn,women earn 77p.

Even in the countries that boastcloser pay parity, such as Iceland,Sweden and Norway, there is a catch.In most cases it is only young, child-less women who are earning the sameor more than their male counterparts.Women who start families quickly fallbehind.

It is not only children that affect thelikelihood of a woman earning thesame as a man. The size of the paygap varies by country, industry, jobtitle and age. Even in the same role, awoman is highly likely to be paid lessthan the man working next to her.

The only light amid this gloom wasthat for many years the gap seemed tobe narrowing. That trend now appearsto be in reverse.

Recent research in the UK showsthat the gender pay gap has widenedfor the first time in five years. Figuresfrom the Office for National Statisticsshow the gap increasing from 9.5 percent to 10 per cent for full-time work-ers in 2012.

In its annual survey of hours andearnings, the Trades Union Congress

found that this disparity was farhigher in the private sector, wherethe gap is, on average, 19.9 per cent,compared with 13.6 per cent in thepublic sector.

More than 40 years after the EqualPay Act came into force in the UK,women still face a stark gap in theirearnings compared to men’s and expe-rience one of the highest pay differen-tials in the EU.

The Fawcett Society, an equalitycampaign group, called the change adamning indictment of the govern-ment’s record when it comes towomen’s standing in the economy andasked the coalition to introduce a ded-icated women’s employment strategy.

“These figures show clearly thatrelying on voluntary action isn’tworking,” says Charlie Woodworth,the society’s head of communications.

TUC general secretary FrancesO’Grady agrees: “The light-touch, vol-untary approach to tackling genderpay inequality is clearly failing.”

In Australia, a similar story isunfolding. The Australian Bureau ofStatistics says men were paid, onaverage, 26 per cent more thanwomen last year, up from 24 per centa decade ago.

This increase can partly beexplained by the fast rise in wagespaid to employees in the miningindustry, which has experienced aresurgence in recent years and whichmostly employs men.

In the rest of the world, some of thebiggest gender pay gaps can be foundin Asia. South Korea, the world’s 15thlargest economy, not only has thelongest working hours in all OECDcountries, it also has the biggest paygap between men and women.

To address this, the Seoul govern-

ment has increased spending to pro-mote gender equality and emphasisedthe importance of equal pay for equalwork in the Equal Employment andSupport for Work-Family Reconcilia-tion Act. Yet despite these efforts, thegap remains 39 per cent, barelychanged from the 40 per cent of 2000.

Some analysts believe the differ-ences can be explained by the expecta-tion that women will take on most ofthe work at home and are more likely

to have their careers interrupted bycaring for young children or elderlyparents.

A further cause is the average payin the industries that traditionallyemploy women, and those thatemploy men. Women around theworld are more likely to be employedin part-time work and in professionssuch as cleaning or caring, which payfar less than traditional male-domi-nated industries, such as transport orconstruction.

Even when they are employed inthe same industry, have the same edu-cation and the same experience,women are likely to be paid less. Cata-lyst, a non-profit organisation thatresearches women and business in theUS, has found that women with MBAsare paid, on average, $4,600 less intheir first job than men.

The ILO points out that in manycases, men and women employed inthe same line of work are given differ-ent titles and that this can make ahuge difference to their lifetime earn-ings. For example, women tend to bestewardesses, whereas men are flightattendants; women are cooks and men

are chefs. The job titles given to menconfer more importance, and often,more money, it says.

Researchers for the Higher Educa-tion Careers Services Unit analysedhow much students who were inhigher education in 2006 were earningby 2012 and found a striking imbal-ance even between graduates with thesame background.

Of 17,000 recent graduates, theyfound the take-home pay of more thanhalf of the women ranged between£15,000 and £23,999. Men were farmore likely to earn £24,000 or more.“Women earned less than men whostudied the same subject,” they found.

In certain industries, things appearto be changing. The Institute of Char-tered Accountants in England andWales, which has more than 140,000members, says younger women areclosing the pay gap: women under 30achieve 97 per cent of their male coun-terparts’ earnings, compared with 92per cent in 2012.

However, as women get older andstart to have children, the gap opensup. A lack of flexible working hoursand affordable childcare means many

women exchange full-time roles forpart-time work, often in a differentindustry, and so miss out on promo-tions and career progression enjoyedby men.

A study by one Harvard economisthas suggested that the pay gap couldfall if more companies offered flexibleworking hours. Professor Claudia Gol-din found the pay gap in industrieswith flexible hours, such as health, issmaller than that of professions withrigid schedules, such as finance.

According to the OECD, the pay gapis not just something that affects theindividual women involved. Discour-aging women from continuing workonce they have a family means thatemployers have a poorer talent poolavailable, something that affects econ-omies as a whole.

“It’s not just about economicempowerment,” says the OECD’s Clos-ing the Gender Gap report. “It is amoral imperative. It is about fairnessand equity and includes many politi-cal, social and cultural dimensions. Itis also a key factor in self-reportedwell-being and happiness across theworld.”

Elaine Moore finds everynation pays men morethan women – and hearsthat voluntary action totackle the issue is failing

Working together: research shows that even women in the same job in the same industry, with the same qualifications and experience, are paid less than men Alamy

Thursday February 27 2014

On other pages

Part­time work ‘Time to stopviewing it as a women’s issue’: call ismade to end flexible working stigma

The finance sector Banking intransition as role models emerge –but popular culture still sees no placefor senior women

The role of HR departments Toomuch effort is wasted by focusing ongender differences

2 ★ FINANCIAL TIMES THURSDAY FEBRUARY 27 2014

Ending stigmaof part­timeworking ‘wouldbenefit all’

On the face of it, working parttime is still very much a“women’s issue”, and badfor career progression. But

that is by no means the end of thestory.

Far more women than men workpart time: more than 40 per cent offemale employees in the UK are parttime compared with 12 per cent ofmen, according to the Office forNational Statistics. The impact onwork status, using earnings as aproxy, is huge: median gross hourlyearnings of part-time employees in2013 were 36 per cent less than thoseof full-time employees.

The limited range of quality part-time opportunities is a big problem,forcing many women to “downskill”.More than a quarter of part-timersfeel overqualified or overskilled forthe job, according to a survey of 1,000people working fewer than 30 hours aweek, published by the TimewiseFoundation.

When asked why they had taken thejob, 58 per cent said it was the bestthey could find with hours to fit theirlives.

Added to the mix is the careerstigma of part-time work beingequated in some managers’ mindswith lower commitment to the job.When applying for or accepting a newpost, 52 per cent of respondents in theTimewise survey said they were“nervous” or “very nervous” aboutasking for flexible hours.

However, change is afoot. First, awider range of people is working part

time today than in the past. “Theworld of work has moved on and parttime has evolved as more profession-als aspire to be ‘agile’ in their work-ing patterns,” says Kate Grussing,managing director of Sapphire Part-ners, a search firm specialising indiversity on boards and in executiveroles.

“While most part-timers are stillwomen who are mothers, the propor-tion of both men and non-parents hasgrown, and that’s a good thing. Theworld of work doesn’t necessarily fitinto five-day-a-week packages.”

Charlotte Gascoigne, a doctoralresearcher at Cranfield School of Man-agement, has interviewed part-timeprofessionals and managers in the UKand the Netherlands working for aglobal professional services firm and abig IT company.

Her study includes men and women,parents and non-parents, peopleapproaching retirement, and somewho “just want more of a life”. Bycontrast with the UK, she says: “Parttime in the Netherlands is the newnormal – it’s completely unremarka-ble to work four days a week.”

In the UK, a growing number ofsenior people are working non-tradi-tional patterns, too, and are speakingout about the benefits, as demon-strated by the Timewise “Power Part-Time List” of 50 business leaders, fea-tured in FT Executive Appointmentsin December.

Second, the notion of part-time andfull-time jobs is being challenged bythe changing nature of work. Withcommunications technology enabling“anywhere, any time” work, stickingto rigid schedules and locations isbecoming irrelevant in many roles.

Tom Schuller, visiting professor atLondon’s Institute of Education,argues that it is time to “dethrone”the full-time work model. He takesparticular issue with the binary divi-sion between full and part time. “It’scrazy to lump people doing 29 hours aweek in the same category as those

doing six hours a week,” he says. “Onfour days a week you’re a ‘part-timer’– that’s really absurd.”

He has coined a “Paula Principle” (amirror of the Peter Principle) that“most women work below their level

of competence”. This highlights theparadox of female outperformance atschool and university, and women’sgreater participation in training andadult learning, versus their lowerearnings and career progression.What needs to happen, he believes, isfor more men to work part time.

Some of these changes will take

time, so what can individuals andemployers do now to avoid undervalu-ing part-time work?

One piece of advice for individualsis to stick with the same employerwhen changing work schedule.Research by academics Sara Connollyand Mary Gregory found that a quar-ter of women in highly skilled jobsdowngraded occupationally whenswitching to part-time work, but thefigure rose to 43 per cent among thosewho also changed employer.

Individuals also need to be smartabout what is happening in theirorganisation and their team, and toaddress clients’ needs when planninga cut in hours. At the same time, theyshould be prepared to decline non-priority tasks to avoid working theequivalent of a full-time job for part-time pay.

Martha Whitmore, director of opera-tions in consultancy McKinsey’sEmea banking practice, has held ademanding role on an 80 per cent con-

tract for years. She works two shortdays a week in the London office andlonger days at home for the rest of theweek. Working with people in othercountries helps, as it makes little dif-ference whether she is in an office, athome or in a car.

“Every time there’s a big issue, abig meeting, a challenge, I’m alwaysthere,” she says. “I answer emailsvery quickly. I overcompensate oncommitment but I’m also very firm onboundaries.

“When I work more than 80 percent, I make sure I balance that off atother times. I can switch quickly, so Ihave an hour with my children andan hour back at work with my fullattention. I focus on top priorities – Idon’t do anything that doesn’tdirectly help my Emea banking prac-tice.”

From the employers’s perspective,one important step is to reframe “parttime” as a team resourcing issuerather than a personal lifestyle prefer-

ence, says Ms Gascoigne. “Workdoesn’t come in full-time lumps. Tasksand relationships can be redistributedamong a team.”

Another step is to advertise farmore higher-level jobs as part time orflexible. Some say this would be abreakthrough, especially if organisa-tions simultaneously highlighted sen-ior part-time role models of bothsexes. “Too many women candidatesfeel they have to lie and pretend thata lack of flexibility is not somethingthey care about – and then six monthsinto the job they have to tell theiremployer that they need it,” says MsGrussing.

“Organisations should say thatthey’ve promoted someone to partneror to a senior executive role who ispart time. It is material informationfor those looking up the ladder won-dering how they can make it work.”

Alison Maitland is an FT contributorand co-author of “Future Work”

Any time, anywhere: technology enables more flexibility and means a wider range of people can work part time Dreamstime

‘Too many womencandidates feel they haveto lie and pretend that alack of flexibility is notsomething they care about’

Women and the Workplace

FlexibilityAlison Maitland looksbeyond the claim thatflexible options are a‘women’s issue’ and findswork patterns changing

FINANCIAL TIMES THURSDAY FEBRUARY 27 2014 ★ 3

Banking ‘in transition’ as role models emerge

There are no women seniorexecutives portrayed in therecent crop of films that fea-ture the financial sector –

including The Wolf of Wall Street andBlue Jasmine – says Wendy Alexan-der, associate dean at the LondonBusiness School.

“In the cultural context of bankingor financial services, women don’t fea-ture,” she says. “They still suffer frominvisibility.”

While some might argue it is betterfor men to be blamed for the frothyexcess and risk-taking that led to thefinancial crisis, stereotypes are power-ful and still designate women as bet-ter suited to certain sectors withinfinance, such as human resources,rather than the traditionally machoenvironments of trading floors andwealth management.

Much is being done to counter this,with women themselves doing moreto raise their profiles and to becomerole models, ensuring that a pipelineof women emerges from younger gen-erations to reach the top levels offinance.

“Finance is in a period of transitionand there’s a lot of soul-searchingabout how risk is collateralised andmanaged and about the role of incen-tives,” says Ms Alexander. “Women asrole models are emerging just asthere’s a real focus within finance onteams and collaboration and how toget a better alignment with strategicvision.”

There is no single way to the topand there is growing recognition thatareas such as human resources nolonger fit the category of being softerand fluffy with an emphasis on so-called people skills.

“Traditionally, many people wentinto HR because they liked workingwith people – but it can be the mostruthless area because they have to beutterly dispassionate in deliveringunpleasant messages,” says AnneRichards, chief investment officer atAberdeen Asset Management.“Although HR is perceived as softer,in my experience it’s tougher.”

The rise of Avid Modjtabai, former

director of human resources and nowsenior vice-president of consumerlending at Wells Fargo, is beingwatched closely in the US, says JenaAbernathy, senior partner of execu-tive search firm, Witt/Kieffer.

“It appears rare that executives –male or female – can move from whatis considered a support function intoan operational function, thereby set-ting up the ability to ascend to the toprole,” she says.

Another example she gave was last

year’s appointment of Mary Barra aschief executive of GM, a first for theauto industry.

Ms Barra was leader of humanresources at the company which, “inmany cultures, can be considered anon-starter for moving any further inthe organisation”.

Another woman who might help tochange perceptions is Janet Yellen,who this month became the firstwoman to chair the US FederalReserve.

“If I gave anyone any advice, Iwould say reach across the table andlearn everything about your organisa-tion and take on tough assignments –jobs that give you a cross-functionalplatform – and take roles that arevisible,” says Ms Abernathy.

Helena Morrissey, chief executive ofNewton Investment Management andfounder of The 30% Club, which aimsto boost the proportion of women inthe boardroom to 30 per cent, chairsOpportunity Now, a business-backed

campaign for gender diversity in theworkplace. It has called on women toshare their work experiences to helpunderstand why the careers of somany stall when they hit their 30s.

Early results show that 53 per centof women aged 28-40 in financial serv-ices believe that men and women atthe same level in their own organisa-tion earn different amounts. Only 28per cent believe they earn the same.

Just 29 per cent believe the opportu-nities to advance are fair and equal

between women who have childrenand those who do not, and there is aroughly equal split between thosewho agree that opportunities toadvance are fair between men andwomen and those who do not.

Meanwhile, a survey conducted lastyear by recruiter Robert Half foundthat 68 per cent of respondentsthought banking, financial servicesand insurance organisations weredoing enough to improve gender rep-resentation within senior manage-ment roles.

But the survey also found that 83per cent of female employees whoreturned to work after maternityleave moved into part-time or flexibleroles.

This is unlikely to change unlesswomen are successful at advancingtheir careers at the same rate as theirmale counterparts before and afterhaving children.

“Until this changes then we’ll stillhave a talent gap,” says EstelleJames, director of Robert Half UK.“We’ve seen a lot change in the past10 years and the new generationaccepts women can do anything butwe’ve still got a lot of catch-up to do.”

Ms Richards of Aberdeen AssetManagement, who graduated in elec-tronics and electrical engineeringbefore earning an MBA from Insead,says she sees even fewer women inengineering than in finance and moremust be done to encourage them.

“We have to remember to be gener-ous and help women step up the lad-der,” she says.

Changing perceptions: Janet Yellen, Avid Modjtabai and Anne Richards have all broken through the glass ceilings within their own organisations

Women and the Workplace

The financial sectorSharmila Devi reports thatin popular culture, thereare no senior women infinance – but finds signs ofchange in the real world

Leadership initiatives Organisations seek ways of improving ‘the pipeline’

A number of organisations andinitiatives now exist to help greaternumbers of women succeed in parts ofthe finance sector where they areparticularly under­represented, writesSharmila Devi.

Fewer than 10 per cent of financialadvisers are women, for example, andSt James’s Place wealth managementfirm runs a Women’s Initiativecampaign to promote wealthmanagement as a career choice.

“It’s been a traditionally malepreserve, dominated by men and thequestion is how to change this,” saysAdrian Batchelor, director of the firm’straining academy. “Sometimes a clientprefers to have a woman financialadviser and industry has to respond.”

Catherine Johnson worked in thehotel and catering sector and as aproject consultant but she is now

following her dream of working infinance after setting up as an adviserwith the help of St James’s Place.

She sacrificed much of her personallife to pursue her studies – getting upat 5.30am and studying into theevening for the best part of a year. Butshe says it has been worth it to do thework she wanted to do.

“The boundaries are blurring and ifyou really want something, you have tofocus, set goals and make it happen,”she says. “There were more men doingthis in the past but it’s also about theindividual and passion. It excites meand I’ve got two passions – pensionsand estate planning.”

Wendy Alexander, associate dean atthe London Business School, says waysof improving the pipeline of futurewomen leaders include the MBAscholarships for women offered by

Lloyds bank, which help to reduce thefinancial barrier for women pursuingpost­graduate management education.

“Women who go into finance do itbecause they really want to, particularlybecause the fashion now is forentrepreneurial pursuits,” she says.

“Women’s leadership is at lastcoming of age and we believe that theyare particularly strong on the teamapproach, thriving on collaboration andprizing diversity at work. We havemade real progress in attracting morewomen to London Business School butwe know there is still much to do.”

Aisling Meany graduated with aLondon Business School masters infinance in 2010 and now works in amergers and acquisition team at aninvestment bank. “I don’t think there’sbias in the hiring of women and that’sthe same across the City,” she says. “I

love it and no day is ever the same.“But you do need to make sacrifices

to respond to deadlines, such assometimes cancelling a holiday, andthat can cause problems if you start afamily. Young women can be reluctantto join investment banking.”

To have a family and do the job,women needed a very supportivepartner and network. “Women workthree or four years and then exitprivate equity or M&A but then you dosee this with men too,” she says.

She has been helped by sponsorsand mentors, not necessarily women,to navigate the technical and politicalpitfalls. “We will see more women dowhat were considered macho roles.The previous generation has done a lotof work breaking barriers and it’salready an easier path for ourgeneration,” she adds.

4 ★ FINANCIAL TIMES THURSDAY FEBRUARY 27 2014

Much HReffort ‘wasted’by focusing ondifferences

HR departments in listedcompanies have been work-ing overtime for the pastthree years to show they

are doing all they can to address theunder-representation of women inbusiness leadership roles.

In early 2011, Lord Davies of Abers-och published his review for the UKgovernment on women in the board-room and recommended a 25 per centvoluntary target for female represen-tation by 2015.

But although HR departments havebeen vociferous about taking up thechallenge, some believe much of theireffort has been repetitive and withoutimpact. This is because they set outwith the premise that men andwomen are fundamentally different inhow they pursue a career, rather thandifferent in what they are willing toendure in its pursuit.

“Most of the gender diversity initia-tives focus on difference. But we havebeen interested to find how few differ-ences there really are between menand women,” says Rachel Short, direc-tor of the London office of YSC, abusiness psychology consultancy.

It has been working alongsideKPMG, the professional services firm,on research aimed at understandingthe gender profile of UK companies aspart of an initiative by The 30% Club,a campaigning body, called BalancingThe Pyramid.

The initial analysis of a cross sec-tion of FTSE 350 companies publishedlate last year suggests a need to“update our expectations about the

similarities and differences in the pat-tern of men’s and women’s careers”,according to a joint statement.

The study found men and women tobe “equally ambitious” overall, butwith a different “rhythm” to theircareers, which might give seniorfemale executives broader experiencethan male counterparts.

It also found reason to question thewisdom of being overly reliant on pro-moting gender-targeted flexible work-ing arrangements as a means ofengaging women as they rise to thetop of an organisation. “Althoughnearly twice as many women thanmen work under formal flexible work-ing arrangements, women are sensi-tised to the promotion-limiting impli-cations of such arrangements,” thereport says.

It raises the danger that flexibleworking becomes seen as the“woman’s option” and a euphemismfor “going nowhere” in their career.

HR departments can, however, takeheart from the research on the valueof internal monitoring activities inrevealing shifts of perception. Thestudy revealed a change in how maleand female leadership is valued incorporate environments.

It says: “The vast majority of posi-tive leadership behaviour is viewed asidentical in men and women.” But itsays stubborn pockets of stereotypingremain: “Women are more frequentlydescribed as providing values-basedleadership, while men continue to berated more frequently for their com-mercial acumen and logical-rationalapproach to problem-solving.”

The study adds: “Authenticity is thekey to women’s leadership. By thetime women reach executive commit-tee level, they are far more comforta-ble being themselves as opposed toself-managing to meet gender expecta-tions.”

KPMG’s initial findings revealed inDecember 2013 showed FTSE 100 exec-utive committees were 21 per centfemale on average and that a man

starting his career with a large FTSE100 UK company is still 4.5 times morelikely to make it to the executive com-mittee than his female counterpart.

HR departments might be forgivenfor wondering how much of a return

they have achieved for all theirefforts. Those in the HR sector mak-ing the case for more specific metrics– and targets – to bring about changeare getting louder and finding newtools. Technological advances meanthere are easier and quicker ways of

exposing the true state of organisa-tions than using time-consumingresearch (see Technology, right).

But the danger remains that HR canbe used to disguise a lack of realaction. Kate Lye, founder of KLI Con-sulting, a leadership and employeeengagement consultancy, sees the HRfunction in many organisations beingused to avoid the real issues.

Commenting on the pledge thismonth by Lloyds Banking Group tohave 40 per cent of its senior rolesfilled by women by 2020, she says toomany chief executives respond to the“women question” by pointing todevelopment activities, such as leader-ship courses, women’s networks orwomen-friendly policies. She arguesthat this response defines genderimbalance as a training and policyissue, passing responsibility from theexecutive to HR.

She gives Lloyds’ chief executive,

António Horta-Osório, credit for tak-ing a stand but says there are nosimple answers. “If the solutions wereso straightforward, many of the chiefexecutives I work for would have gottheir hiring managers on the casesome time ago rather than sufferembarrassment whenever the Daviesreport was mentioned,” she says.

“Training and HR policies are theknee-jerk response most companiesmake when they first look at diver-sity. But increasingly, businesses areconcluding that they are helpful butcertainly not sufficient for the level ofleadership change that Lloyds andmany other banks are looking for.”

She says Mr Horta-Osório needs tounderstand the barriers holding backwomen at Lloyds and remove them:he should ask what it is that men andwomen do in his organisation thatresults in fewer women reaching sen-ior positions.

In credit: António Horta­Osório is praised for his pledge to increase the number of women in senior roles at Lloyds Anna Gordon

‘Training and HR policiesare the knee­jerk responsemost companies makewhen they first look atgender diversity’

Women and the Workplace

Technology Visual datacan inform the debate

A 2013 report on Gender Equality inthe UK said that “cultural change tofoster gender parity requires both thehardware of gender parityprogrammes and the software of asupportive culture”, writes DinaMedland.

But another kind of software,capable of taking large amounts ofdata and making it visual to give itimmediate, hard­hitting impact, isalso proving helpful in informing thegender debate.

Data Morphosis is a UK companywith a flagship product called GenderGap – technology that extracts allrelevant diversity data, includinggender, ethnicity, sexual orientation,disability and more, directly fromorganisations’ HR systems. Thisenables immediate analysis and is apowerful tool in shifting theargument, says Sam Jones, thecompany’s chief executive.

“The whole ‘women in business’discussion has become tired andrepetitive. Competency doesn’t haveanything to do with gender. Thecompanies that can track the journeyof individuals who work for it are theones that do the best,” he says.

Gender Gap’s technology, he says,“shows the truth about yourorganisation swiftly. It enables HRdepartments to cut through the dataand see the trends.”

Founded in Hong Kong, GenderGap first worked with investmentbanks, and has clients today in theFTSE 100, says Mr Jones. It hasworked with companies in sectorsfrom engineering to cruise liners.

The 2013 Gender Equality report,by Darci Darnell and Orit Gadiesh ofBain & Co, cites evidence thatwomen make up 56 per cent of UKuniversity graduates, yet a far lowerproportion make it to board level ofFTSE 350 companies. Mr Jonesaccepts there are multiple factorscausing this imbalance, but saystracking the data on the careerjourney from leaving education tobusiness leadership positions has tobe a “no­brainer”.

“We see this as a powerful toolbecause it removes opinion from theequation,” says Mr Jones.

The power of data and research tobring about change was reinforcedthis month by the announcement inthe US of No Ceilings: The FullParticipation Project. This partnershipincludes The Clinton Foundation andMelinda and Bill Gates, the formerMicrosoft boss, and will gather andanalyse data about the status ofwomen and girls’ participation aroundthe world.

Human ResourcesDina Medland looks atpractical steps taken toredress gender imbalances– and asks why they havehad so little impact