Financial services has worst gender pay gap of any UK industry

25 February 2019 6 min. read

As the annual gender pay gap reporting deadline approaches in the UK, only around one in 10 of the organisations expected to submit their data have done so.  The mean gender pay gap of those submitted sits at over 12%, and according to a new survey of UK organisations, companies leaving their release to the last minute are missing their chance to ‘own’ their narrative.

Despite continuously encouraging clients to improve their gender representation and reduce gender pay gaps, the consulting industry of the UK is failing to improve its own outlook on the matter, according to an analysis of data submitted to the Government. A recent report from the Financial Times found that no major consultancy in the UK has a median bonus gap lower than 20%, thanks to few women reaching senior roles.

The consulting industry is not alone in its lagging gender divide, however. Having commenced in 2018, in just under two months the UK’s second gender pay gap reporting deadline is approaching April 4th 2019, and with 1,000 – or around 10.5% – of the total number of organisations expected to submit their data having done so, research firm has crunched the numbers to find that pay gaps are most pervasive in industries historically monopolised by men.

Due to the dominant ideas held by society’s elites even toward the end of the last century, women were marginalised by most non-service based industries, while roles relating to care, admin work and other similar positions took on higher proportions of women as a result. The legacy of that discriminatory behaviour is still evident in the data analysed by

Financial services has worst gender pay gap of any UK industry

Of all the sectors examined, health and social work had the most consistently low pay gap, with a median of 2%, and a mean of 5.1%. This is likely due to the higher portion of that workforce being women than other sectors, and though there are still more men in top positions overall, a larger number may progress to senior roles in health and social work organisations.

Anthony Horrigan, CEO, added a further explanation for this smaller gap. He said, "Most health and social work operate a pay band system, so there is no inter-band discrepancy. Most of the gap exists because more men make it to the upper quartile. You can see this by looking at the lower and upper quartiles; there are 4% more men in upper than lower."

Elswhere, while admin services saw a larger pay gap, it was the only sector to see a bonus gap in the negative – a mean of -83.9%, or a median of -92.7% – suggesting that women actually took home a larger bonus than men in the sector. In contrast, agriculture has a deceptively low median pay gap, but one of the highest mean pay gaps of any industry. The difference indicates that there are a few negative outliers, and a relatively small population of women in the workforce could account for this. According to the International Labour Organisation, agriculture makes up just 0.6% of the work women take in the UK, falling by around 0.5 points since 1991, having been historically low to begin with.

In keeping with this hypothesis, the largest median pay gaps of all were meanwhile found in construction, financial and insurance, and mining sectors. These sectors have each struggled with historically low engagement with women, while showing that a culture of excluding women has not only been present in blue-collar industries. While the fact that women make up only 11% of the construction workforce, and just 2% of tradespeople is a statistic often pored over by experts, until recently little has been made of the ‘boys club’ culture that has historically excluded women from the upper echelons of the finance world.

Professional services gap

Everything from inflexible working practices to a prevailing culture of sexual harassment have recently been pointed to as making the professional services sector a hostile environment for women looking to start a career, with financial and insurance firms being no different. As this means that women reaching the peaks of these firms are exceptions, rather than a new standard, and while construction still has the highest mean pay gap of 25.5%, the financial sector holds the unenviable title of the least equitable for its mean pay gap of 26.8%.

The figures will make for problematic reading for the bulk of employers, with the majority of UK firms now keen to appear ‘on message’ when it comes to gender parity, but materially failing to address the matter at present. Commenting on the findings, Innes Miller, Chief Commercial Officer of said that it will be important for organisations to clearly articulate what they are doing to close their gender pay gaps.

Miller explained, “Last year we saw the majority of reports explaining what the gender pay gap reporting legislation was and how if differed to equal pay. While an important part of the education and awareness process, employers this year must define what steps they are taking to close their gaps. Most reports still lack detail on the steps being taken and how the outcomes of these steps are measured.”

From this perspective, the consulting industry may indeed present an example from which other sectors can learn. While the figures on gender disparity in consulting undeniably paint the industry as having failed to heed its own advice, the consulting industry is characteristically a master of owning its mistakes. Pay gap figures from the top firms in the UK were accompanied almost universally by statements from the likes of the Big Four and the MBB strategy giants explaining that their sizeable gaps were due to fewer women occupying senior roles at those companies, and assurances that policies were now in place to change that.

At the same time, this will be important for other aspects of corporate diversity. With the government consultation on ethnicity pay gap reporting also having come to an end on 11 January this year, employers should expect additional reporting requirements as the government seeks to encourage employers to think about what steps they can take to create fairer workplaces. However, many employers do not currently have the data to meet the requirements of the proposed legislation.

Fiona Hathorn, Managing Director Women on Boards UK added, “Greater transparency will have significant implications for employers who in time may find it increasingly difficult to attract the best talent, win new business and appeal to investors who are focusing ever more on the social impact credentials of the companies they invest in. Now is the time for management to communicate the quantifiable steps they are taking to make a positive and sustainable change.”