Women in the U.K. are four times less likely than men to be among the top 1% of earners in financial and professional services, according to analysis by the London School of Economics. And despite decades of efforts to narrow the gender gap in pay and career progression, it’s gotten slightly bigger since before the pandemic.
In brief
Women occupy 19.4% of the top 1% highest finance and professional services roles, down slightly from the three year pre-Covid average of 19.7%.
However, while still far from equal, women’s share of the top 10% of positions was higher, at 28.3%, and has shown signs of progress, increasing by 2.5 percentage points over the period.
The LSE analysis, which drew on the U.K.’s main survey of economic activity, the Quarterly Labour Force Survey (QLFS), from January 2017 to June 2023, also found some rebalancing in terms of seniority. Women now comprise 37% of senior managers and directors in professional services and finance, roughly the same as the percentage of female full-time employees.
Why hasn’t gender equality improved more?
The persistent gender seniority gap, which widens as you get closer to the top of the career ladder, suggests corporate efforts to narrow it—with all the well-documented benefits it brings of access to talent and more diverse thinking—have been insufficient.
The reasons behind it are complex, including a significant career penalty for mothers but not for fathers, bias—whether blatant or unconscious—and wider societal factors that disadvantage women’s careers, such as a higher average burden of household chores, and child and elder care responsibilities.
These factors have proven stubborn over many years, so in a way the question to ask is why would they have improved, in the absence of major changes in attitudes or behaviours?
Indeed, the COVID-19 pandemic may have set back gender equality, as layoffs disproportionately affected women, while businesses have a tendency to defund diversity, equity and inclusion (DEI) programs when trading conditions are tough. In the U.S., this has been compounded by a conservative backlash against affirmative action, often through legal means.
“We are going backwards, but I am not surprised. For progress to be made there needs to be a bigger shift towards recognizing that diversity is good for business. There also needs to be significant investment in upskilling managers to become inclusive leaders recognizing that leading diverse teams is a skill. Without it, I will be giving the same quote 10 years from now,” said Dr Grace Lordan, founding director of The Inclusion Initiative at LSE and associate professor in its Department of Psychological and Behavioural Science.
Hybrid working may have been expected to favor working mothers, but there is evidence that people who work remotely suffer a career disadvantage compared with those who come into the office, while return-to-office orders have started pushing moms out of the workplace.
What’s next?
The trend towards more equal gender representation in mid-senior roles and among the top 10% of earners is encouraging, particularly coming in relatively male-dominated sectors like finance and professional services.
It would be reasonable to expect knock-on effects on the most senior and well-paid roles in the coming decade, simply because more women will have had the experience necessary to be considered.
However, the trend persists that women’s chances of progression decrease with every level of seniority. Until that dynamic changes, the gap will remain considerable.