UK’s Women in Finance Charter highlights diversity challenges for FS firms

Too few women in financial services get to the top. Plenty of young female graduates join financial services firms, but these women often do not progress beyond the mid-tier or they leave the sector. Those are the opening lines to the Women in Finance Charter 2024 report which has just been published highlighting the challenges facing firms when it comes to attracting and retaining female talent in the FS sector. We’ll speak to a D&I specialist about a tool a number of clients are using to address that problem. 

This goes back to 2015 when the government asked Dame Jayne-Anne Gadhia, former CEO of Virgin Money, to lead a review into the representation of women in senior managerial roles in financial services, focusing on the talent pipeline at the executive population below board level. “Empowering Productivity: Harnessing the talents of women in financial services” was published in March 2016. The review found that in 2015, women made up only 14% of Executive Committees in the Financial Services sector. In response to the recommendations in that review, HM Treasury launched the Women in Finance Charter. There are now over 400 firms, covering 1.3 million employees, voluntarily signed up to the commitments of the Charter.

The review makes four recommendations designed to help firms’ improve gender diversity. They are:

1 Appoint one member of the senior executive team who is responsible and accountable for gender diversity and inclusion
2 Set and publish internal targets for gender diversity in senior management
3 Publish progress annually against these targets in reports on their website; and
4 Have an intention to ensure the pay of the senior executive team is linked to delivery against these gender diversity targets

Of the 400+ firms signed up to the Charter many are Pinsent Masons’ clients committed to meeting the goals set by the Charter. Clients tell us that one of the main drivers is to attract and retain female talent in the business and to address the gender pay gap which remains a serious problem in the sector. According to the latest data, the average pay gap stands at 26.6% for the FS market, which is significantly higher than the 12.1% seen in the wider UK market.

To help clients close the pay gap and improve diversity, Pinsent Masons’ D&I consultancy Brook Graham alongside the Equality Team has developed a tool designed to make use a firm’s own data to identify specific actions which the business can take. It’s called the ‘Workforce Demographic Forecasting Tool’ and involves modelling the workforce over a defined period – a 5-year period – and putting in place a number of targeted actions designed to achieve the specific diversity goals the business has set for itself including, but not limited to, the gender pay gap. So, let’s hear more about it. Earlier I caught up with Brook Graham’s Kieron O’Reilly to understand how it works:

Kieron O’Reilly: “It’s a tool that we use to get some results and it’s a simple thing. We’ve created a box, if you like, where we put information at one end and, at the other end, an analysis comes out and we use that analysis to be able to model a workforce and have a look at what it will look like in five years and ideally then, we will develop it to say what do we really want it to look like? So, we can alter the model to achieve the diversity aims we’re looking for and it’s from that we can then decide what actions we need to take to achieve them.”

Joe Glavina: “How did it come about, Kieron? Where did the demand come from?”

Kieron O’Reilly: “What we found, and the reason we produced it in the first place, was that a lot of our clients, especially in industries, traditional industries, like construction, and energy, ones where we see a lot of work going into, say, gender equality programmes, but not a lot of results being achieved as a whole. When we looked at those organisations we found that it is the same problem across the organisation, but it manifested differently in different parts of the business. So, imagine a different business unit, or a department, and in the past, what we would do is spend time looking at each of those departments to work out what we could do to help affect the change. However, typically, those things are pretty much the same. So, we realised that using data, we can put a dataset together that applies to all situations and it speeds up the process. So, it allows us to very quickly do an analysis of where an organisation is at a local level and identify local and practical changes that can be made, and it’s quite quick now.”

Joe Glavina: “Does this go wider than gender pay gap reporting?”

Kieron O’Reilly: “It does. That’s where we began but, of course, with the development of ethnicity pay gap requirements, we started to use those. We also can use it for any diversity strand, pretty much, and in the past we’ve used it for disability, we’ve used it for sexual orientation, we’ve used it for religion and different areas. So, we are able to use it across a range of different diversity strands and therefore, looking at pay gaps, looking at workforces, it allows us to plot out and predict how to make the changes we need to achieve the aims we want.”

Joe Glavina: “Is it something that that the client uses on their own or do they have handholding from Pinsent Masons? Or does Pinsent Masons use it for the client?”

Kieron O’Reilly: “We use it for the client. So, essentially, we ask them for a range of data and information and we then use that to process the analysis and then from that we will interpret it for them and then it is from that interpretation that we then work together very collaboratively to look at what are the local changes that we can put into effect, because all clients have a range of different needs and competing resources, even from day-to-day work. So, what we do is put them together that fits in the way that works for their business as usual. But it starts with us, and then we work collaboratively with clients.”

Joe Glavina: “Anything else?”

Kieron O’Reilly: “I think the main point, really, is that when you’re trying to deal with some of these challenges, people feel is too complicated or too complex. What we find by using this particular tool is that it makes it very clear, very simple, what actions need to be taken and those actions are built into what people are doing every day. So, it’s actually normal language, it’s normal activity, it’s just how they are supported  and equipped to do that change and carry out those activities. So, the reality is it doesn’t feel different, it doesn’t feel strange, it’s actually what most people are doing locally. So, it’s, it’s something that is easy to affect and I think that’s the difference. It’s no longer complex, it’s no longer complicated, it’s clear, it’s easy to understand, and it’s something you can get on with on your day-to-day work.”

If you would like to know more about the ‘Workforce Demographic Forecasting Tool’ then please do get it touch with Kieron – his contact details are there on the screen for you – or you can contact your usual Pinsent Masons’ adviser. 

LINKS 
– Link to Women in Finance Charter