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Exploring the LGBTQIA+ Pay Gap in Financial Services

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Exploring the LGBTQIA+ Pay Gap in Financial Services

​Enduring pay gaps are sombre reminders of the systemic inequities faced by marginalised groups in today’s workplace. While pay gaps tend to reference the gender pay disparity between men and women (a median difference of 14.3% in the UK as of 2023), it’s a complex issue that affects people from a range of underserved demographics, intersecting with characteristics that include sexuality.

What is It?

A 2019 study from LinkedIn and Black Pride discovered that LGBTQIA+ workers in the UK were paid £6703 less than their heterosexual colleagues, representing a 16% shortfall. The same study found that 38% of Brits don’t believe it’s appropriate for their LGBTQIA+ colleagues to be out at work.

Moreover, Proud Ventures, a community of LGBTQIA+ investors, exited founders, angel investors, and venture capitalists, conducted a first-of-its-kind study on UK LGBTQIA+ founders – they discovered that 75% of LGTBQIA+ founders withhold their identity from other investors in the ecosystem.  

In a space like financial services, where gender pay gaps are amongst the worst in the nation, LGBTQIA+ individuals are often extremely vulnerable to unequal pay. This is partly due to widespread discrimination and exclusionary working cultures – a report from the CIPD found that 40% of lesbian, gay, and bisexual employees had faced conflict and harassment in the workplace. This number rises to 55% for Transgender employees.  

Conditions have slowly improved in recent years, but there is plenty of work to be done in the fight for equity. Regulatory updates (including the proposed diversity reporting rules from the FCA and PRA) will hopefully spur the sector in the right direction.

The limitations of the existing LGTBQIA+ pay gap data can’t be ignored – more inclusive reporting needs to be introduced to develop a comprehensive understanding of the situation. Until that happens, what can leaders do to make a meaningful impact today? And what are the barriers to a more inclusive, equitable working future?

Making a Difference

Pay gaps appear for many reasons, including a lack of inclusivity, transparency, and accountability. Top LGBTQIA+ talent will be looking for inclusive employers, and if Broadgate has anything to do with it, they will be equipped with the means to negotiate a fair salary.

To dismantle the LGBTQIA+ pay gap, decision-makers need to take a wide view of its many enablers. From recruitment to offboarding and every touchstone in between, a proactive effort to bolster diversity, equity, inclusion, and belonging must be present. This can include:

  • Transparent pay policies and career pathways – When career progression milestones and salary expectations are clearly highlighted, you can better mitigate potential bias in promotion/pay raise decisions.

  • Developing inclusive policies for the LGBTQIA+ community – Inclusive policies are highly attractive to top talent, particularly younger generations who value authenticity over any other workplace trait (authenticity is the most important value for Gen Z talent according to research from EY). Inclusive language policies, mentorship and sponsorship programs, employee engagement groups, pronouns on email signatures, and health insurance plans that cover domestic partner benefits are a prime place to start.

  • Conduct internal Audits – without regular internal audits, it’s impossible to identify areas of improvement. The more internal data you have, the easier it will become to develop targeted solutions. Anonymous surveys can also be a great tool for gathering qualitative feedback (pulse survey platforms like Lattice are useful for this).

  • Create a culture of belonging – Sponsoring pride events, hosting internal workshops, allocating budget to employee-led engagement groups, and delivering regular training can help contribute towards creating a culture of inclusion where people feel as though they belong.

  • Unconscious Bias Training – Unconscious bias affects us all. Frequent bias training can prevent exclusionary decision-making based on the grounds of someone’s identity, leading to a more equitable business.

  • Partner with LGBTQIA+ advocacy groups – dedicated advocacy groups can provide valuable insights and advice on how to close the LGBTQIA+ pay gap – sometimes, an independent, outside perspective can make all the difference.

An Ongoing Journey

Diversity and inclusion are in a constant state of evolution. It’s partly why it can be so difficult to implement meaningful behavioural change when you need it most. These changes are possible, provided you encourage leadership buy-in, set targets, and recognise your accountability.

A more equitable future for the LGBTQIA+ community is a better future for everyone. Typically, LGBTIQA+ inclusion is a fantastic barometer for the quality of the working experience at a business, so it’s important to make sure you get it right.

Support from Broadgate

Through our diversity-focused approach to recruitment and consulting, we’ve been supporting businesses across the financial services space since 2015. We’ve had great success in building inclusive communities over the years (check out our amazing Pride in Tech community), and we hope to continue growing it as we build more connections in the coming years.

Whether you’re interested in connecting with an inclusive employer, joining a thriving professional community, or you’re hoping to build a more equitable recruitment process, we have you covered. Reach out to the Broadgate recruitment team for support: