Diversity in financial services - the reputational risk is real
Published at 09:27 AM on 21 February 2017
Financial services has the largest gender pay gap in the UK, with women on average paid 34% less than their male counterparts, according to PwC's Women in Work Index
Nearly three quarters (72%) of global financial services CEOs see a lack of available skills as a real threat to the growth of their businesses
Diversity is set to become a real reputational risk as gender pay reporting becomes mandatory
UK banks beat insurers and asset managers on reputation for diversity and inclusion
New PwC research ranks the UK’s financial services sector on their progress in addressing workplace diversity, with banks doing better than insurers and asset managers. But, at 34%, the sector still has the largest pay gap in the UK and, as gender pay gap reporting becomes mandatory from April, PwC says that this will be a major area of focus for stakeholders (including the media, employees, prospective employees and customers) and a key reputational issue.
In a new report, Opening up on diversity: getting to grips with the reputational risks, PwC says a lack of diversity in banks, insurance and asset management firms could become a lightning rod for public disillusionment, similar to high executive pay following the financial crisis.
PwC says the link between workforce diversity and reputation needs to become a real business issue for management as media and stakeholder interest increases. The report states that regulatory interest in diversity and inclusion is also set to rise with regulators keen to promote inclusive decision making, through a focus on the diversity of people making decisions at the top of organisations.
Employment trends - hiring, automation and digital skills (from PwC’s 2017 global CEO survey)
Nearly a fifth (17%) of global financial services CEOs plan to reduce headcount in the next 12 months - with 86% of the jobs lost a direct result of automation and technology
Only around a half (53%) of Financial Services CEOs believe they have strong digital skills, little change from when the question was first asked of business leaders 20 years ago
Commenting, Jon Terry, global financial services people leader at PwC, said:
“This is no longer just an HR issue or the right thing to do. For firms falling behind in addressing their diversity issues this is becoming a real business risk.
“The Financial Services industry continues to focus on attracting and retaining the talent it needs to remain competitive, and employees are increasingly saying they value working for organisations which take diversity seriously. Disclosure of gender pay gap figures later this year will up the ante for financial firms, who will need to explain why their pay gap is so high and what they are going to do to address the issues. Otherwise they risk alienating a generation of employees and customers."
Notes for editors.
Drawing on publicly available information on 39 leading Financial Services organisations that are active in the UK market, PwC analysed how strategies, policies and progress on diversity and inclusion are likely to be perceived by key stakeholders. From disclosed strategies, objectives and key performance indicators to levels of engagement and accountability within senior management,the analysis looks at information in the public domain. The result is a progress rating in strategy, leadership, HR processes and other initiatives. It offers valuable insights into current perception; gaps in policy development, measurement and communication.
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