Use evidence to close gender pay gap
With the greatest pay gap of any sector, finance has the opportunity to demonstrate the greatest rate of closure, so it’s time for firms to lead the way by using a more evidence-based approach, argues executive coach Geraldine Gallacher.
With the highest gender pay gap of any sector, pressure is growing on the finance industry to close the gap as an urgent priority. But I’m in no doubt the issue is being seriously considered.
In my experience, finance has invested more resources over the past five years to tackle gender diversity issues than any other sector. Embracing initiatives such as unconscious bias training and Women in Leadership courses with enthusiasm is giving way to disillusion as the gap stubbornly persists.
So, what’s going on?
New insight from the government’s Behavioural Insights Team suggests that firms may be focusing on what’s easy to deliver rather than what works. An audit of 30 action plans published on the government portal, in which firms describe how they will close the gap, paints a bleak picture. Of all the actions proposed just 4% are what the BIT team categorise as effective.
The audit highlights a key challenge for employers: although the will exists to tackle the issue, employers need more information on what works and what doesn’t. Answering this requires a great deal of resource and the opportunity to review evidence at a macro level across many organisations and industry sectors.
Work currently underway by the BIT analyses actions used by employers to close the gap across all sectors. An initial report categorises those actions as ‘effective’ (they’ve been found to have a positive impact), and ‘promising’, in cases where further research is required to improve the evidence on their effectiveness and how to implement them. ‘Mixed results’ describes actions that sometimes have a positive impact and other times a negative and therefore need further investigation.
Interestingly, several of the initiatives in the latter category - unconscious bias training, diversity training, diverse selection panels, self-assessed performance - have been deployed extensively across the finance sector. By contrast, actions classified as effective – sharing salary ranges to encourage negotiation, introducing transparency to promoting, pay and reward processes - are emerging for discussion among many firms.
Business is a practical environment and there will be times when evidence-based research lags behind the sense an employer has that an action is working. Parental coaching is a great example of this. Several qualitative studies show this intervention encourages women to stay attached to the workplace on becoming parents and encourages them to advance their career despite a dip in confidence that many workers experience on return from maternity leave. Few quantitative studies have been attempted as it is hard to isolate variables that influence decision making.
With the greatest pay gap of any sector, finance has the opportunity to demonstrate the greatest rate of closure. It’s time for firms to lead the way in the closing the pay gap, this time using a more evidence-based approach.
Geraldine Gallacher is founder and MD of the Executive Coaching Consultancy.
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