Women: mind the gap

Women held just 5% of CEO positions In financial services firms in 2021, 19% of c-suite roles and 21% of board seats. So what’s being done to rectify this – and how can firms bring about real change? Part of the answer lies in a change to the language of diversity

In March this year, the Women in Finance Charter (WIFC) called for ‘urgent action’ on gender parity, warning that without it, it could take three decades to achieve equality within the industry. 

The people behind the government-backed initiative believe that advancement in this area is stagnating. They point out that, worryingly, the proportion of women in senior management roles has increased by a mere 1% since 2020. 

“Progress towards gender equality in the financial sector remains frustratingly low,” said Amanda Blanc, Chief Executive of British insurer Aviva and champion of WIFC. “Women, companies and society cannot afford to wait 30 years when we can achieve this in 10.”

There’s no denying that strides have been made in financial services in recent years. In February 2021, Jane Fraser became the first woman to lead a Wall Street bank, Citigroup, and in July, Morgan Stanley gave the role of Chief Financial Officer to Sharon Yeshaya, formerly its Head of Investor Relations.

In the UK, Baroness Shriti Vadera became the first woman to head a major British bank, Santander, in 2014. In the same year, Dame Inga Beale became CEO of Lloyd’s of London – the first woman to take on this role in the insurer’s 326-year history. 

Statistics also show that today, women make up 43% of the financial services workforce. But this doesn’t quite provide us with the full picture. Far from it in fact. 

The percentage of female financial services industry leaders globally remains at just 12% , and when they do make it to director level, women are paid £500,000 less, on average, than their male counterparts. What’s more, according to FCA data, of the 5,815 senior-level promotions and hires that took place in the financial services sector over the past year, just 1,365 (24%) were women.  

“The proportion of women in more senior roles is increasing, but frustratingly, progress has been slow,” says Alexis Dolling, Executive Director of People and Culture at the Jersey Financial Services Commission.

“Over the past few years, we’ve seen significant shifts in certain areas, such as retail banking, but less in the likes of the commercial, wealth and trading parts of financial services.

“There are, however, a number of different initiatives that companies can follow to try to rectify the imbalance that we still see today. These range from active career management and improving the intake balance in early career stages, to training on bias in the workplace as well as recruitment and promotion targets.” 

Disproportionate impact

We know, however, that despite all of the schemes in place at the time, the pandemic disproportionality affected women. In every year up until 2019, the average overall attrition rate for companies was slightly higher for men than women, but Covid-19 dealt a major setback and saw a near immediate effect on women’s employment. 

In 2021, one in four women were considering leaving the workforce or downshifting their careers, versus one in five men. And while all women were affected, three major groups experienced the largest challenges: working mothers, women in senior management positions and black women. 

This disparity came across as particularly stark among parents of kids under 10: the rate at which women in this group were considering leaving was 10 percentage points higher than for men.

But, Helen Baxter, Global Head, Talent Acquisition and Talent Management at IQ-EQ, thinks that the pandemic could have brought with it some small positives. “Covid-19 impacted gender equality and the gender pay gap across all sectors,” she says. “But it could also prove to be a catalyst for change. 

“For example, it highlighted the fact that women need upskilling in the Channel Islands in order to boost standards of living,” she says. “PwC reported in its 2021 Channel Islands Women in Work Index that increasing the female employment rate to match Sweden’s could raise GDP by 5% in both Guernsey and Jersey (equivalent to £176m and £259m respectively). 

In the same report, PwC claimed closing the gender pay gap in Guernsey would generate a 26% increase – the equivalent of £226m – in increased earnings.

“The pandemic drew attention to how women can suffer from gender imbalance in the workplace due to part-time hours and/or childcare concerns,” says Baxter.
 
“At IQ-EQ, we track and measure equal pay. We’ve also introduced a host of benefits to allow flexibility for all – including hybrid working, flexible hours and a generous parental leave package.”

Dolling stresses the commercial importance of more diversity in the financial services sector. 

“Diversity will provide deeper connections with all customers – current and future – and therefore more relevant products and services,” she says.

“It will help eradicate group think and result in a broader inclusion of views and input when it comes to decision-making, which is especially important in terms of risk management. Diversity will also help ensure a wider pool of talent – which is much desired in a saturated recruitment market – and a workforce that is fair and inclusive and therefore more engaged. 

“It’s key to remember, however, that diverse thinking needs to go beyond gender and should instead include a wide spread of people in terms of ethnicity, age, educational background, social classes, sexual orientation and religion.”

Changing language, changing views

Also imperative, according to Dolling, is being mindful of how we talk about women’s careers and the fact that they have to ‘juggle’ family life. 

“This incorrectly reinforces the notion that this is solely a woman’s responsibility. I know a number of male colleagues who have moved to an 80% week and/or compressed hours in order to take on caring responsibilities. Examples like this need to be highlighted so it becomes the norm for men and women. 

“Similarly, parental leave is extremely important. It not only allows men to have a fulfilling parenting role, but it also enables women to return to the workplace more easily after having had a child,” she continues. “Parental leave symbolises the fact that this is a joint responsibility and it sets the tone for both the mother and the father to equally focus on their career and raising a child.”

It’s not uncommon, however, for frustrations to be felt around diversity. “In some corners, it’s something that human resources teams push onto leaders, which means that there’s resistance or lack of understanding as to why it is important,” Dolling adds.
 
“To support this, we should continue to challenge myths and stereotypes. Financial services companies should continue to run education programmes on bias and support people when it comes to finding the right language to talk about all aspects of diversity in the workplace. 

“All too often, people feel tongue-tied and are unsure of how to speak about these issues for fear of offending people. It’s vital that leaders are as confident speaking about diversity and inclusion as they are commercial and economic topics.”

Dolling says she also always recommends that people consider more training on how to manage a diverse team, how to spot talent and potential within candidates who might be less ‘traditional’, and how to better understand the commercial and societal benefits of more diverse thinking in the workplace.

“We could also get better at thinking of and talking about careers like we do portfolios. What I mean by that is that at different times there are different needs. Both genders can and should have career gaps either for study, travel, family or caring needs. Staff should feel able to drop in and out and progress at different speeds. 

“The days of climbing the ladder in a linear fashion in one firm are behind us. Instead, it’s about gathering a portfolio of experiences that should fit around other life activities,” she continues.

“Many organisations run development programmes to help women ‘get ready’ for senior roles, but I actually think this reinforces the myth that women are less competent and need more help. Put simply, it’s not the women who need fixing.”