.jpg)
An increase in public awareness of the gender pay gap in the UK has been a long time coming but is very welcome. This increase in consciousness is necessary in order to begin taking positive action towards closing the gap, which by now, we all agree is in the interest of everyone. The financial services sector is still one of the least successful in bridging the gender pay gap, with the average discrepancy amounting to more than double that of the national median of 9.7% in March 2019, according to the Office for National Statistics.
Gender pay gap reporting is a very useful tool for understanding how one’s own organisation is affected by imbalance. Before reporting became mandatory for larger companies there was only a tenuous understanding of what the pay gap meant for organisations, but reporting has produced figures and statistics which have led to aspirational targets and measurable action plans of reducing the gap. While this is good news, this year’s first half figures hadn’t shown much progress on those of 2018: they improved by just 1%. According to the World Economic Forum, at the current rate, we shouldn’t expect to see global parity until 2220, more than 200 years from now. This shocking revelation proves that increasing awareness alone isn’t enough; what we need is proactivity and constructive initiatives.
While reporting is only necessary for companies of 250 people or more, this represents just 1% of all businesses in the UK. We need to look more broadly at the long-term social impact of not addressing this issue, beyond just business alone, and remember to assess how this impacts people’s lives, both now and in the future. It is for this reason that the Chartered Insurance Institute decided to lead by example by volunteering its own figures despite the fact that we fall below the threshold of mandatory reporting. The CII’s figures have shown improvement. The CII has almost halved the gender pay gap since the report produced in 2017 to 14.77% today. We did this by actively reassessing the history of our practices with an honest approach to analyse how they have affected different people in different ways. It is through understanding the scale and nature of the problem and mastering the tools that can help us resolve it that progress can be made. This was a challenging process, but one which has had a clearly positive impact.
The consequences of ignoring the gender pay gap can have serious business implications. What has become apparent from research conducted by the Insuring Women’s Futures campaign, a market programme which is hosted by the CII, is the pay gap is in fact a symptom of a wider disparity of conditions which affect the entire financial lives of women starting from a young age.
The Insuring Women’s Futures campaign conducted extensive research into what it is that constitutes women’s financial wellbeing and has highlighted six significant moments which disproportionately impact the financial wellbeing of women. This represents moments in women’s lives where they are especially susceptible to specific pitfalls, and it is at these times where interventions can be made to improve things. Entering the workplace only constitutes one moment that has a significant impact on female financial wellbeing. The collective impact of these six moments – which also include the changing relationship status of women – result in women’s earnings amounting to just 20% that of their male counterparts over the course of their life.
The Chartered Insurance Institute’s own experience shows there is no single solution to the challenge of the gender pay gap, but a good place to start is with a willingness to acknowledge that the problem exists and to put clear, deliverable action plans in place to address it.
The good news is the insurance profession has always exhibited an admirable ability to be ambitious. With clearly defined targets established by a consensus within the profession for what positive change looks like, I have no doubt that we can make real positive headways towards a better, more fair and secure future for all.
