British investment banks pay women 56% of what their male colleagues earn

New data on the gender pay gap in British investment banking will arrive next week, and the numbers so far don’t look good. A sample of 10 large banks that already reported before the October 5 deadline shows that the average difference was 44.5% between the hourly wages of men and women in April 2020, compared to 45.2% last year. This means that women earn 56 cents for every pound that men earn when comparing their average hourly wage.

HSBC, the unit comprising the UK lender’s investment banking operations, had the largest division at 54.4%, an improvement of 0.7 percentage points over the previous year. While most of the 10 banks reported a smaller gap than what was reported in their latest report, progress in recent years has not been rapid.

Only 9% of HSBC’s highest-paid quartile are women, making it the worst performer in the sample on this metric as well. Not all banks have yet to report, after the UK government allowed companies to delay disclosure during the pandemic.

Reporting the gender pay gap became mandatory in the UK in 2017 and provided insight into how far women’s earnings lag behind men’s. However, the latest numbers are mostly a snapshot from early 2020 and a compelling assessment of the entire workforce. The figures do not measure the salary of men and women doing the same job, nor are they adjusted for other factors, such as experience or location. Simply put, it shows who has the highest paying jobs. In most companies, men do this.

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Using median numbers instead of the median, an approach that eliminates the influence of high-income earners, slightly reduces the gender pay gap. Under this approach, the 10 bank workers face an hourly wage deficit of 35% in April 2020, up from 37% the previous year.

Several banks that responded to requests for comment cited their efforts to diversify their top ranks and increase the number of women entering entry-level programs. HSBC, for example, runs a “Leadership Accelerator” program to train promising bankers from underrepresented groups.

“We are stuck in the compliance phase,” said Professor Grace Lordan, founder of the inclusion initiative at the London School of Economics and Political Science. “To get to the next stage, we really need to change the culture.”

None of the 10 banks surveyed by Bloomberg News reported that women make up more than one-fifth of the highest-earning quartile.

The picture is complicated because some companies provide separate data from their affiliates. For example, JPMorgan Securities Plc has 13.1% of women in the top salary category, compared to 30.6% at JPMorgan Europe Limited.

The gap also improves somewhat when retail banking and other operations are included, such as HSBC UK, which posted an average gap of 32.9%, showing that parity is still a long way off.