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Women in finance falling behind as top earners as UK's gender pay gap widens

Joy Harjo, Indra Nooyi, and Rebecca Halstead take a picture together after being inducted into the National Women's Hall of Fame on September 24, 2022, in Geneva., N.Y.
Joy Harjo, Indra Nooyi, and Rebecca Halstead take a picture together after being inducted into the National Women's Hall of Fame on September 24, 2022, in Geneva., N.Y. Copyright AP Photo/Lauren Petracca
Copyright AP Photo/Lauren Petracca
By Indrabati Lahiri
Published on
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The pandemic has had a major impact on the numbers, with women facing more layoffs than men, and taking on the main share of unpaid care work too.

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The gender pay gap is potentially getting wider and harder to bridge in the professional services and finance sectors, according to a report by the London School of Economics (LSE) into the gender pay gap. 

Post Covid, the newly produced report from the LSE's The Inclusion Initiative (TII) revealed, fewer women are likely to be top earners in these two sectors.

Men are more than four times as likely as women to be among the top 1% of earners, revealed the report, using data gleaned from the Quarterly Labour Force Survey (QLFS) between January 2017 and June 2023. In contrast, women made up a mere 19.4% of ultra high earners post-pandemic, sliding from 19.7% before the pandemic.

Anna Lane, CEO and president of Women in Banking and Finance said in a press release: "The facts are unequivocal. Without bold and decisive action, the progress women have made is at risk of reversing. Now, we must ask ourselves: isn't it time to establish hard quotas for women in executive, managing director and director positions?

"This is our moment to think boldly - to ensure that women are not merely participants but leaders at the forefront, shaping the future of finance. It's about more than maintaining balance; it's about catalysing transformation and driving our industry forward with innovative leadership."

The situation has deteriorated since the pandemic, with the predicted probability for women to be in the 1% of top earners falling from 0.021 before the pandemic to 0.013 after it. However, the probability for men to be high earners has remained the same both pre- and post-pandemic.

Given these figures, it is perhaps unsurprising that the gender pay gap for the people earning in the top 10% has also remained static, at 20%. Women make up about 28.3% of the top 10% of earners, whereas men account for approximately 71.7%.

Dr Grace Lordan, founding director of TII and an associate professor in LSE’s Department of psychological and behavioural science said in a statement: "The lack of progression of women to the most senior roles in financial and professional services is a major factor contributing to the gender pay gap.

"We are going backwards, but I am not surprised. For progress to be made, there needs to be a bigger shift towards recognising that diversity is good for business. There also needs to be significant investment in upskilling managers to become inclusive leaders recognising that leading diverse teams is a skill."

Some 37% of corporate managers and directors are women against 62.9% of men whereas, in professional occupations, only 35.78% are women against 64.2% being men. Men holding top positions for longer, and people working for longer in general has also made it harder for women to be promoted to more senior roles.

Women are 6% less likely to have full-time jobs post-pandemic

The pandemic has also highlighted several gender inequalities which were already lurking in the shadows. These include women facing more layoffs and furloughing than men, and taking on the lion's share of unpaid care work, for children, as well as ill and ageing family members. 

The LSE's report also highlights that women are 6% less likely to have full-time employment than men, a fact which has not changed very much following the pandemic and the rise in flexible and hybrid working models.

Some sectors, however, such as information technology, seemed to be bucking the post- pandemic trends. Women who work in IT are reportedly 11.6% more currently likely to be in the top 10% of earners, and 5.5% more likely to have full-time roles.

On the other hand, women in more senior positions such as directors or department heads are 3.9% less likely to have full-time jobs.

With several businesses still struggling financially post-pandemic and with slimmer client bases, some diversity, equity and inclusion (DEI) initiatives have been wound up, effectively causing problems for women of colour and women from weaker socio-economic backgrounds in general. 

Teresa Almeida, research officer at TII added: "The persistent absence of women among the top earners and in senior roles within financial and professional services is not just a matter of fairness, it's a missed opportunity for innovation, productivity, and the realisation of untapped potential."

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