Posted on Letter from London: May 15, 2009 11:58 AM
Sexism in the City is a dirty fact of life. Decades have passed, yet macho behaviour, discrimination and secrecy over pay endure for thousands of women working in London's financial sector. While most carry on regardless, some have risked professional exile by suing their firms for sexual or professional discrimination. Last year 44,000 equal pay claims were brought before the courts—more than double the number in 2005.
It's frightening to think that this is where we are, nearly 40 years since the Equal Pay Act made it illegal to have different pay rates for men and women, and 25 years since the European Commission forced the UK to pass 'equal pay for equal value' into law. Only last month, a report by the UK's Equalities and Human Rights Commission (EHRC) found that full-time women workers in the City earned a shocking 55% less on average than men, rising to 60% for fund managers and futures traders.
The most eye-popping disparity was for incentive payments for senior managers: the few women who managed to break the glass ceiling were rewarded with bonuses that averaged 79% less than those for men. This piece of data rang particularly true to me. A couple of years ago I was coaching a very senior woman banker who was one of the top 10 high potentials in a British bank. Anna had 22 years experience, an MBA, a good strategic head and a track record of delivering exceptionally high results. Yet a male colleague—in a casual slip—revealed that one of his male junior team members was earning a bonus significantly higher than hers, and that he was dissatisfied with it. Anna's colleague had no idea that she was earning less than a junior member of his team.
The research could not have come at a worse time for the City, whose reputation has crumbled with the financial crisis. As employees leave risky financial services for safer careers in teaching and banking, the City is facing an exodus of talent for the first time in a decade. But this has not stopped Harriet Harman, the UK's Equalities Minister, who has chosen this moment to declare war on the City. Denouncing it as a 'breeding ground for discrimination and unfairness', she has taken action with a new Bill which will oblige companies with more than 250 employees to publish the average hourly pay gap between men and women. Companies have until 2013 to comply, after which an annual 'gender pay audit' will become law.
Harman is confident that the onus will now be on to companies to show they are being fair to female staff, rather than vice versa. The Bill also tackles discrimination over age and class and outlaws secrecy clauses for pay.
"Old prejudices have to be tackled if the economy is to prosper," she says. I couldn't agree more. I well recall the despair of a university friend who was openly rejected by an investment bank "not because she was a woman, nor because of her qualifications, but because she didn't have the right social background and connections." A brilliant working-class economist with six languages did not stand a chance against a dim, but well-connected member of a society family.
Business leaders and right-wing politicians have reacted badly to the Bill, suggesting that extra regulations will be crippling for businesses trying to fight their way out of recession. It will slow down job creation and delay economic recovery, they protest. That may be true, but it is nonetheless time to root out the ugly prejudices that have festered in the City for far too long. Great crises bring great opportunities—and as far as I'm concerned, this could be the greatest opportunity we've had in decades to clean up the grubby corners of the City.
What are your thoughts? Have you any experiences or views about salary transparency? Do you work in an industry or sector where discrimination is subtle but rife? What are your suggestions for ensuring equality for workers? Are companies already overburdened by regulation or should they be doing more to ensure this kind of transparency?
Equal Pay for Women Scarce in London
Gill Corkindale is an executive coach and writer based in London. She works with managers and leaders from Europe, Asia, Africa, Latin America and the Middle East to develop strategies for business effectiveness and personal change. Formerly management editor of the Financial Times, she uses her journalistic skills and business insights to bring a new perspective on global management and leadership.