News and Press

Gwen Rhys, Founder & Director of Women in the City gives her response to the Equality and Human Rights Commission Report which on April 9 revealed significant gender pay gaps in the finance sector of up to 60 per cent.

My reaction?

First of all I’m delighted – because with a bit of luck, and at long last, this issue will be taken seriously.

I doubt that there’s a woman working in the City who doesn’t suspect or even know for sure that she earns less than her male counterparts, but this report will provide the proof that will hopefully drive the necessary change.

Secondly, of course, I’m appalled that this report is even needed. It’s shocking to think that in these times, the pay gap between men and women is still so great.

What causes this and what needs to change?

There is still the belief – wrongly in many cases – that men are the principal bread-winners and need to be paid more. From an employers’ point of view: “Why change the status quo?” Men have always been paid more and so continue to be paid more.

Moreover, and of even more concern, women are complicit in maintaining this status quo. They refrain from asking for more than they are offered and crucially settle for less than they need or deserve.

And, when they do make a challenge, it is more likely to be emotionally based rather than fact-based. Simply saying “I work really hard, I deserve more money” isn’t going to do it.

Women need to present the reasons for wanting a pay rise in a way that makes the financial return to the business from their efforts crystal clear.

Women tend to believe that if you do a good job well, you’ll be rewarded accordingly. Men know that they have to tell everyone that they’re doing the job. (And there’s hardly a women that doesn’t know that men work half as hard to get twice as far!) In other words, men are much more politically savvy. They know they need to blow their own trumpets and they know how to do it.

And they do this right from the outset of their career. Research undertaken by Linda Babcock, an academic at the Carnegie Mellon University, revealed that, on average, the starting salaries of men graduating with a masters degree from that university were 7.6% (around $4000) higher than female graduates. If this difference continues throughout their careers then by the age of 60 the gap between their salaries will have increased to $15,000. What this means in real terms is that over the course of nearly 40 years of working life, the man will earn over $500,000 more than the woman.

No wonder women are under-pensioned and face poverty in their old age!

Whilst men know how to self-promote, women, on the other hand, shy away from such activity. As children, girls ostracise other girls for bragging and for putting themselves forward. “Who do they think she is?” they say. Boys just don’t have this problem.

Even women who deal with money every day tell me that they don’t like asking for a salary increase; that “talking money” makes them feel uncomfortable. There’s a saying: “If there isn’t a short intake of breath when you tell them your fee then you’re not charging enough” – women need to take note. It’s always easier to negotiate down than up.

I suspect that there are many women who expect their young daughters to tidy up their bedrooms because it’s “a nice thing to do or the proper thing to do” whereas their young sons will be “paid” to tidy up because they won’t do it unless there’s a financial reward.

So men are much more used to valuing themselves from a financial point of view and are less likely to do something if there isn’t a financial reward that is at least commensurate with the task.

Women on the other hand “value” their contribution in ways other than financial – they value being praised and recognised for their work; they value making and having made a difference. It’s not surprising that there are many more female “volunteers” than men.

Time out of the workplace

And of course, more women than men take time out of the workplace – principally to take care of young children. When they return to work they are often unaware of their current market value. Getting back to work is their principal motivation and the salary levels in their minds are the ones pertaining at the time they ceased full time work. So not only did they take a lower salary when they first entered the workforce, they’re now, relatively speaking, taking an even lower one. And of course, as demonstrated above, once someone accepts a lower salary then it’s not just very difficult but very unlikely that they can hike it up to where it should be.

What will Women in the City be doing about it?

Women in the City is an organisation that aims to raise the profile of senior level professional business women working in London’s business hubs and we’ll be following closely the outcomes of this research.

We’ll be encouraging women to take part in the Inquiry and we’ll encourage those women who have succeeded, and our Women in the City Award Winners in particular to support and mentor other women in their quest to be financially rewarded in a way that recognises their contribution to their organisations and the economy as a whole.

I’d also recommend the following short reading list:

(1) “Brag! The art of tooting your own horn without blowing it” by Peggy Klaus

(2) “Women don’t ask” by Linda Babcock and Sara Laschever and its practical follow-up

(3) “Ask for it” by the same authors.