The financial services sector may be holding back its year 1 gender pay gap data for good reason, but collection of year 2 data is only just around the corner.

The UK Gender Pay Gap Reporting Regulations came into force in April 2017, requiring all companies with 250 or more employees to publish details of their gender pay and bonus gap on an annual basis.  The deadline for publishing the first set of data is 4 April 2018. So far, about 400 of the 9,000 in-scope companies have  published their data and only a very small number of those are in the financial services sector (Virgin Money and TSB being amongst the few to publish so far).

The UK Government Equalities Office had hoped that more companies would have published their data by now. It has recently been writing to employers stating that, in early 2018, the government intends to publish a list of employers who have submitted their gender pay gap data, a list of those who have demonstrated that they are on track by registering and a list of those who have not yet registered – who they regard as having have taken no action.

With that in mind, companies which have not already registered for gender pay gap reporting on the government’s online reporting service, should aim to do so as soon as possible. Companies do not need to submit their gender pay gap data in order to register. The data itself can be submitted at a later date (but it should be before the deadline of 4 April 2018).

Most companies have had enough time to complete the calculations (which are based on pay  as at 5 April 2017 and bonus in the 12 months up to 5 April 2017).  Why is there such a reticence to publish? And why might the financial services sector be particularly reticent?

Many financial services firms already publish targets and some data as part of their commitment to the Women in Finance Charter, so the concept of transparency about diversity-related data is not new. But gender pay gaps in the sector are generally said to be around double those in the economy as a whole, and firms are concerned at the prospect of media and public interest.  This concern is well founded. Companies who have published early have been subject to tough media scrutiny.  The Financial Times recently went so far as to challenge companies with statistically implausible results, causing at least one such company (Hugo Boss) to change its official submission.

Most importantly, any pre-existing research on the size of the gender pay and bonus gap in the financial services sector is no longer reliable.  Once the majority of in-scope companies have calculated and published their data following the methodology set out in the Regulations, a new norm will emerge. Firms know that they will be compared against that new norm, but don’t yet know what it is, or whether their data will be “better” or “worse” than their main competitors.

All of this means that many firms are watching and waiting, in many cases hoping to see what their peers publish before publishing their own data as well as considering what to say in the accompanying narrative – and to employees and stakeholders.

A watch and wait strategy does, at least, offer the chance to learn from others who have published early. Most are not in the financial services sector, but there are still lessons to be learnt from their published reports. After all, the financial services sector is not alone in having a significant gender pay gap.

What can be learnt from reports published by firms in other sectors?  A closer look at the narratives or explanations accompanying the raw data reveals a number of trends.

Most larger companies are making statements about the lack of women in senior roles, and the impact this has on their gender pay gap. Some are emphasising that their pay system is gender neutral, meaning that a man and a woman performing equally well in the same job role would be paid the same (a claim which can be backed up more convincingly if you have carried out an equal pay audit). Some are pointing out areas where their figures have been skewed by the technical requirements, such as the way the Regulations treat part-timers.  Companies in the financial services sector are likely to make similar points in their narratives. For example, the way the Regulations treat role-based allowances paid in April has the potential to skew the figures.  The underrepresentation of women in senior roles is likely to be a universal theme.

Over the coming weeks, as significant numbers of companies in the financial services sector begin to submit their figures,  we can begin to analyse the trends in the data and reports. A word of warning though – the second year’s data must be based on pay as at 5 April 2017 and bonus in the 12 months up to 5 April 2017.  So it’s not just the deadline for year 1 data that is fast approaching – it’s also the deadline for doing anything about the year 2 data. As the work following the Gadhia Review and Women in Finance Charter shows,  a company’s progress can be just as important as its starting point. We therefore expect attention to turn quickly to year 2 data, and to what companies can continue to do to narrow the gap.


Monica Kurnatowska advises clients from the financial services sector on the employment aspects of strategic projects. She is a partner Baker McKenzie’s London office.