Despite progress being made in closing the gender pay gap in the UK, with the disparity at its lowest point in seven years, four out of five British companies still pay men more than women. Industries such as construction and fishing show varying levels of progress, with construction having a 22.8% pay gap and fishing making strides towards gender pay parity. However, investment firms have reported gaps of over 50% and rising, highlighting significant disparities in compensation between men and women.
In industries like investing, where compensation is heavily skewed towards those managing the most money, bonuses play a major role in widening the gender pay gap. Wellington, for example, reported a mean bonus pay gap of 79.6%, indicating a significant disparity in bonus allocations between men and women. While many firms emphasize paying men and women equally for the same role, the issue lies in the lack of a meritocratic system where the same group, usually men, consistently occupies top positions.
Historically male-dominated sectors like healthcare have made progress in narrowing the gender pay gap to 1.5% in 2023, emphasizing the importance of providing equal opportunities for all genders. In investing, the key to reducing the gender pay gap lies in providing more opportunities for women to manage money, given the significant disparity in asset management ownership and decision-making. Diversifying asset management portfolios by considering demographic diversity can be a strategic advantage for investors in reducing the gender pay gap.
Initiatives like the California State Teachers’ Retirement System’s emerging diverse managers program and Carlyle’s Initiative to Increase Diverse Talent in the Asset Management Industry are making strides in fostering diversity in asset management firms. The TPG NEXT iShares Exponential Technologies ETF, launched in 2019, aims to invest in underrepresented alternative asset managers to strengthen their access to capital and provide strategic advisory support. By increasing assets managed by women and other underrepresented groups, investors can play a proactive role in closing the gender pay gap in the investment world.
The data from the UK underscores the persistent barriers faced by women in the workforce, especially in industries like investment where disparities remain prevalent. While progress has been made in sectors like healthcare, construction, and fishing in addressing the gender pay gap, efforts to increase diversity in asset management portfolios can lead to improved performance and reduce the gender pay gap. It is imperative for investors to acknowledge and address the unintended risks of a lack of gender diversification in asset management and take steps to support underrepresented talent in the industry.
