New rules follow other European countries intended to achieve balance in workplace
New requirements by the U.K. government are shining a bright light on the gender pay gap across a range of industries, including asset management.
The issue gained prominence earlier this month, when companies with more than 250 U.K. employees submitted government-mandated reports on compensation by gender. The reports, among other things, identify the average hourly pay differential between male and female employees. The reports also include a look at gender representation in pay quartiles and bonus payments.
The U.K. reports follow similar efforts by other countries, including Germany and Norway, and the European Commission.
The commission is promoting programs that would see all businesses achieve a target of 40% female senior and middle managers through a number of initiatives, including its Strategic Engagement for Gender Equality program. That program, starting in 2016, focused on amending laws to ensure businesses would pay men and women equally for the same work. The commission also enacted social policies around child care across industries to help businesses achieve better gender equality in decision-making roles.
Germany, also in 2016, implemented a law that aims to ensure equal access for women and men to executive positions in private and public companies.
Stock-listed companies have to appoint women to their boards, as vacancies appear, until the boards become one-third female. Also, some 3,500 German private companies are obliged to set targets defining how they will increase the number of women on company boards, as well as upper and lower management levels.
Money managers interviewed by Pensions & Investments acknowledge the U.K. reporting requirements highlight the need for increased gender diversity at all levels of an organization.
'No quick fix'
"There's no quick fix," said Kerry Christie, chief people officer at Aberdeen Standard Investment in Aberdeen, Scotland. "Gender pay figures we have published show we need to take action. We are absolutely committed to improving these figures and we have said from the outset that we welcome this legislation as a catalyst for change."
Companies were required to report their data as of April 2017. As such, both Standard Life and Aberdeen Asset Management filed separate reports, rather than a combined data set to reflect their merger, which was approved by shareholders in June 2017. According to Standard Life's report, female employees accounted for 28% of the "upper pay quartile" and 64% of the lower quartile.
At Aberdeen Asset Management, women accounted for 22% of the upper pay quartile and 52% of the lower.
"We believe sustainable progress comes from growing a gender-balanced workforce at all levels of our business," Ms. Christie added. "While this approach takes time, we have a strategy in place and are targeting interventions to accelerate closing this gap over the next few years."
Parent company Standard Life Aberdeen Group plans to support female professional development through partnerships with Women Returners Professional Network and the Diversity Project over the next 12 months. The firm also seeks to develop executive sponsorship for a female succession pipeline in the next year.
As of April 2017, men were paid on average 34% more than women at Aberdeen and 42% more than women in the Standard Life Group.
Industry sources said the gender pay gap often results not only from women returning to work in a part-time capacity after a maternity leave, but also from their becoming disengaged early in their careers and leaving the industry because the roles are set up by and for male counterparts — not playing to strengths of both genders.
Some money managers also said they need to create roles for women in portfolio management and technology units, where they are the most scarce, to increase women's organizational presence overall.
BlackRock (BLK) Investment Management U.K., for example, said in its report that opportunities for women will need to be created in portfolio management or technology functions because the majority of those jobs are now held by male executives.
In efforts to reduce this, some 39% of BlackRock's senior leader hires in those departments in 2017 were women, said the firm's disclosure report.
Rachel Lord, senior managing director, head of Europe, Middle East and Africa at BlackRock said: "This is ultimately about creating more opportunities for women to become leading investors, technologists and senior executives. But, we need to move faster and do it better."
BlackRock identifies emerging leaders via its recently launched Leadership and Excellence Development program; in 2017, 57% of the participants were female.
Still, some 72% of top-paying jobs, were held by men in 2017 even though some 53% of BlackRock's all entry-level hires were women, according to BlackRock's report.
BlackRock had a mean hourly pay gap of 20% in 2017, as a result of fewer women in senior roles, the firm said in the report.
"The U.K. gender pay gap regulations give us the opportunity to discuss the challenges we face and focus our efforts to improve,'' Ms. Lord said. "We have made a long-term commitment to increase the number of women in senior positions at the firm through hiring, retention, promotion and development initiatives."
However, she added: "We also recognize the scale of the issue and multiyear commitment required."
This year, Allianz Global Investors launched a development program called "Unlocking Your Potential," which aims to equip talented vice president-level female employees with the knowledge, tools and support to achieve career growth, said Marine Palies, global inclusion and diversity leader in Paris. Allianz's ambition is to get women to take 50% of vice president level roles, some 35% of director level roles and some 30% of managing director level roles by 2020, which would reduce the overall mean pay gap of 23%.
"We know women are underrepresented in the more senior roles, and we are enhancing our recruitment practices to ensure we are hiring the best person for the position including by reviewing the language of our job postings ... to ensure they are phrased in a way that is inclusive," Ms. Palies said.