Gender Pay Gap in HSBC UK: Implications and Recommendations

This report discusses the issue of gender pay gap in HSBC UK, which pays men 59% more than women on average. It highlights the legal regulations against gender pay gap and the cost and benefits for HSBC in dealing with this issue. The report provides recommendations such as removing glass ceiling and changing the recruitment approach to reduce the gap.

MANAGEMENT REPORT

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Contents
INTRODUCTION.................................................................................................................................1
Gender Pay Gap in HSBC UK...............................................................................................................1
Aims of the company.............................................................................................................................3
Legal regulations against gender pay gap..............................................................................................3
Cost and benefit for HSBC in dealing with this issue............................................................................4
Recommendations.................................................................................................................................4
Conclusion.............................................................................................................................................5
REFERENCES......................................................................................................................................6

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INTRODUCTION
UK government has been very much strict on the issues such as gender pay gap in different
organisations. New government of Theresa May has made policy changes so as to ensure that
least amount of gender pay gap remains in UK companies. Gender pay gap is understood as
the difference in the pay scale or the salaries of male and female staffs working in an
organisation at different position. This is calculated by checking the difference in the hourly
earnings of the male and female employees irrespective of their roles (Scott, 2018). A decline
can be seen in the gender pay gap in UK firms after the pressurisation of the government but
the situation is still worst in some of the firms. HSBC one of the biggest British Multinational
banking and financial services holding firm has one of the worst gender pay gaps among all
the firms in UK. This report highlights the issue related to gender pay gap in HSBC UK. It
also showcases different aspects related to the gender pay gap and its implications on HSBC.
Gender Pay Gap in HSBC UK
Gender pay gap has become one of the severe problems for the companies working in UK
and so is the case with HSBC. This bank is world’s 7th largest bank hence significance of this
issue become very much relevant. After the government’s decision of Brexit, they are under
certain pressure to strengthen the weak points in the internal agendas hence HSBC is also
under huge pressure to fill this gap. According to reports presented by the company, Reuters
says that HSBC on an average has paid men 59% above that of women. Second being Virgin
Atlantic having 58% gender gap followed by Barclays giving 48% more to male employees.
Not only in salaries, HSBC had a median gap of 61% for bonus payments between its female
and male staffs. This is the condition when the strength of its female employees more than
54% but the condition remains to be worse as most of them are not into highly paid jobs.
Higher paid jobs are taken by male colleagues (Gov.UK, 2018). To be precise the hourly
rates suggests that women is earning 40p for even 1 pound earned by a men.
HSBC said that it had enhanced the proportion of senior posts held by women to nearly 27%
last year from what was 22% in 2012. Their leadership states that they recognise that more
work has to be done in this regards so as to address their gender balance especially at the top
most level. Company said that they are confident in their approach for payments and if the
payment difference among men and women in parallel roles and might not be explained by
performance or experience, it made appropriate adjustments for it (BBC News, 2018). For
each pay quartile, the proportion of women is depicted in the graph below:

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Source: Gender pay gap report HSBC holding, UK.GOV
The bonus payment was also received by 87% of women workers when compared to the 88%
of men workers. In that also the mean bonus for women is 84% lower than that of men and
the median bonus pay was also 57% lower than that of men.
As per the researchers, the condition in the banking sector is so much worse as companies are
more focused towards talent management then to check that whether it is creating any
discrepancies in salaries of both the genders. Actually very small members of highly paid
workers are actually skewing up the mean of the wages. Only 29.4% of HSBC’s board
members are women (MacLeavy, 2018). This becomes worse in the case of UK as most of
the HSBC highly paid jobs is assigned in UK only. Company also cannot go for higher
payments to the female workers just for increasing the salaries as it will directly affect the
overall costing of the firm. This is the reason that there is imbalance in the junior roles being
assigned to the women workers who works at lower payments. In HSBC, more than 67% of
the junior roles present in UK are filled by the women workers (Butler, 2018). This company
also stated that the gender pay gap is also such big because banking jobs are highly dependent
on the part time jobs and the larger proportion of the these part time jobs is occupied by the
female workers. They are earning bonus on the pro rata basis. Company also states that the

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data is so poor because there is diversity in the banking portfolio as it includes retail and
investment banking.
Aims of the company
Company has aimed to provide 30% of the roles at the senior level to female staffs by the end
of 2020 (MacAskill and James, 2018). They have also aimed to request gender diverse
shortlists while hiring new leaders and hence would check the gender balance in the
development programmes for its workforce. Their management has said that they have made
efforts to make change in the situation but it will take time and requires appropriate focus
over the distinct period of time. It is including inclusive hiring essentials course for all hiring
managers. Company is planning to hire more gender balanced graduates and also aim to
ensure a balanced representation in the talent development programmes creating partnerships
with external firms as well as enlarging opportunities for women in the global markets and
banking divisions (Cortes and Pan, 2018). This would be done for accessing sponsorship and
mentoring support. It includes programmes focused at director level. HSBC is also looking
for seeking the ways to enhance its working proposition flexibility. Firm’s gender pay gap
will also be addressed by making the balance between the networks by creating a
transparency and consistency in the pay especially for junior level workers (Hurn, 2013).
According to their Human resource head, they are highly dedicated to build diverse and
inclusive workforce that will have reflection of the consumers they serve as well as for the
communities they work for. They are also working on their pay strategy so as to attract and
motivate employees who is having talent regardless of the age, ethnicity, gender, disability or
any other factors unrelated to experience and performance of the employees. Gender balance
across businesses and level of seniority has become their priority and they are committed
towards it.
Legal regulations against gender pay gap
For even more than 50 years, UK has a Britain’s equal pay act. Almost all the companies
have complied with this act along with HSBC but the discrepancies lies in assigning roles for
highly paid jobs. The Equal pay act also suggests prohibiting any less favourable treatment
among men and women in terms of pay of the employment (Glazebrook, 2016). The new
scheme launched under the May’s government suggests that companies with more than 250

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employees will have to report the pay gap will have to reveal the greater prevalence of men in
the highly paid jobs and hence will have to take actions to make changes.
Cost and benefit for HSBC in dealing with this issue
The changing nature of the business and the changing demands of the employers from the
employees will have a direct impact on the cost and benefits of the company. In the long run,
it is seen that in dealing with the issue there will have a specific impact on the cost of the
company especially the costing involved in the process of human resource management.
Company cannot reduce the number of male employees at the top level significantly as they
will also have to manage the gender pay gaps. Increasing the pay scale of the women workers
will dissatisfy the male workers working at the same levels (Lips, 2013). The costing will
also get affected in terms of the fact that increasing the salaries of the women will also have
to increase the salaries of men. At the same time most of the women are working at the lower
levels of the organisational structure hence increasing their salaries will have a significant
effect on the costing of the company. This is also because in banking firms most of the
employees work at the lower levels of the organisational structures.
On the other hand there will be significant benefits from increasing the pay scale for the
women workers. They will feel more motivated towards working for the company. At the
same time, there is also a chance that women who are working at the lower levels of the
organisation can find themselves in a better position to remain in the organisation (Manning
and Saidi, 2010). This will improve their productivity which is very much necessary for the
company in the highly competitive environment. The reduction in the gender pay gap will
attract more female graduated talents to work for the company. It will also help in building
the image of the society. This will benefit the firm as women working at different level of the
organisation will feel more confident that they can reach to the top of the organisation.
Recommendations
In order to improve the situation, there are certain types of recommendation which can help
the company in maintain the balance between the genders at all the pay scales.
Removal of Glass ceiling: It is found that most of the women at the HSBC units face the
problems related to glass ceiling. This restricts women to reach at the board levels and they
are restricted at certain levels only. This will help in improving the numbers of women

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workers in the higher paid jobs. Cost involved in this process will not be high as the position
will be giving to the internal women employees (Gregory‐Smith, Main and O'Reilly III,
2014). Time scale for this recommendation will be approx. 2-3 years. Priorities should always
be given towards developing leadership in the women employees.
Change in the recruitment approach: There are many recruitments going on in the
organisation at managers level. It will be effective step if the focus will be on the hiring
female employees for that position. A long term recruitment plan will have to be conducted
checking the availability of the position and the type of staff that will be required at that
position (Atkinson, Casarico and Voitchovsky, 2018). The costing will be high and the time
scale that will be requirement for it will be 4-5 years. Priority must be given to fresh new
talents.
Conclusion
From the above based report it can be concluded that HSBC has a high gender pay gap.
Company pays 59% higher to male than to female in terms of mean salaries. Government has
made compulsory for the organisations to reveal their gender pay scale gap and have
strengthened Equal pay act. Company is planning to have women employees on the 30% of
the higher salary positions. If the company closes the gap a higher amount of cost will be
required hence increasing the costing of the firm. At the same time it is also beneficial for the
firm as it will improve the diversity at the all the levels of the organisational structure.
Removing glass ceiling and change in recruitment approach could reduce this gap.

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REFERENCES
Atkinson, A.B., Casarico, A. and Voitchovsky, S., 2018. Top incomes and the gender
divide. The Journal of Economic Inequality, 16(2), pp.225-256.
BBC News, (2018) HSBC reveals big gender pay gap. [Online] Available at:
https://www.bbc.com/news/business-43418771. [Accessed on 16th December 2018]
Butler, S. (2018) HSBC pay gap reveals men being paid twice as much as women. [Online]
Available at: https://www.theguardian.com/business/2018/mar/15/hsbc-pay-gap-reveals-men-
being-paid-twice-as-much-as-women. [Accessed on 16th December 2018]
Cortes, P. and Pan, J., 2018. Occupation and Gender. The Oxford Handbook of Women and
the Economy, p.425.
Glazebrook, S., 2016. Gender myths and the legal profession. Canterbury Law Review, 22(2),
p.171.
Gov.UK, (2018) Gender pay gap report. [Online] Available at: https://gender-pay-
gap.service.gov.uk/Employer/AFV2D97I/2018. [Accessed on 16th December 2018]
Gregory‐Smith, I., Main, B.G. and O'Reilly III, C.A., 2014. Appointments, pay and
performance in UK boardrooms by gender. The Economic Journal, 124(574), pp.F109-F128.
Hurn, B.J., 2013. Are cracks now appearing in the boardroom glass ceiling?. Industrial and
Commercial Training, 45(4), pp.195-201.
Lips, H.M., 2013. The gender pay gap: Challenging the rationalizations. Perceived equity,
discrimination, and the limits of human capital models. Sex Roles, 68(3-4), pp.169-185.
MacAskill, A. and James, W. (2018) HSBC has worst gender pay gap among Britain's largest
companies. [Online] Available at: https://uk.reuters.com/article/uk-britain-gender-pay/hsbc-
has-worst-gender-pay-gap-among-britains-largest-companies-idUKKCN1HB2DS. [Accessed
on 16th December 2018]
MacLeavy, J., 2018. Women, equality and the UK's EU referendum: locating the gender
politics of Brexit in relation to the neoliberalising state. Space and Polity, 22(2), pp.205-223.
Manning, A. and Saidi, F., 2010. Understanding the gender pay gap: what's competition got
to do with it?. ILR Review, 63(4), pp.681-698.

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Scott, K. (2018) HSBC Bank reports a mean gender pay gap of 59% for 2017. [Online]
Available at: https://www.employeebenefits.co.uk/issues/march-2018/hsbc-gender-pay-gap/.
[Accessed on 16th December 2018]