Could a lack of confidence be causing gender inequality
Posted by: Simon Falconer 6 Jul 12 - 4:26PM
A recent study undertaken by finance jobsite, eFinancial Careers, reveals what has long been known. Women within the financial services sector earn considerably less than their male counterparts. To be specific, on average, they take home £30,000 less in total pay and bonuses than men, a 21% difference in pay. Even with bonuses removed from the equation, women within the sector earn £14,500 less per annum.
One of the key reasons behind this inequality lies in the fact that female finance professionals tend to remain in less senior roles, earning lower salaries and bonuses. This therefore creates the high gender pay gap, as their male counterparts fill the more senior positions. The extent to this underrepresentation at a senior level is highlighted by the fact that women only make up 14.2% of FTSE 100 boards. These figures have seen some improvement in the past year, since Lord Davies’ quota to increase women within the boardroom, however there is still a vast gender gap. Findings at Experis suggest a similar trend, where the majority of senior and board level roles are currently held by men rather than women.
Despite the obvious argument, that women’s career progression is hindered by the strains of being primary care providers and taking time out from the workplace, some argue that the inequality also stems from an underlying lack of confidence. According to former senior banker at Morgan Stanley and J.P Morgan, Kate Grussing, “women are inherently less confident, even with the same qualifications and experience as their male peers”. As a result they are less likely to strive to reach more senior management positions, having less confidence than their male counterparts to apply for such roles.
Research conducted in 2011, by the Institute of Leadership and Management, found that only half of women managers within the workplace said they had high levels of confidence, compared to 70% of men. As a result women are more cautious around promotions, which tend to hold them back from reaching the more senior positions. In turn this helps to create the differences in pay the industry is witnessing.
In a recent interview for the BBC’s Woman’s Hour, Heather Jackson of The Women’s Business Forum also argued that women need more confidence within the workplace and in taking control over the direction of their careers. “It is time now for women to recognise that authentic female role models are what is required” Jackson stated.
However, it is not quite as straight forward as a simple shift in perception for women to gain more confidence. Businesses within the finance sector need to take responsibility for helping women to develop their confidence, encouraging them to move up towards senior level positions. One way businesses can achieve this is to provide mentoring and coaching from senior managers, ensuring females have the support, guidance and advice they need to progress. As more women progress towards senior positions they will act as role models, paving the way for more women to follow.
Not only will women benefit from such a movement but so too will businesses. As Lord Davies stated in his review “it isn’t just about equality, it’s about performance. And the simple fact is that the more diverse your team, the better it performs”. As such changes begin to take place, and more women reach senior management and board level roles, the sector can expect to see a narrowing of the current pay divide between men and women.