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Women in Financial Services: Challenges & Solutions

Date: 30 July 2015

Financial services are lagging behind other professional industries when it comes to addressing gender diversity. It seems that within the sector, firms are failing to strike an equal balance, despite recent research indicating that businesses perform better when more women are present at board level.

An article on the American Banker website details how even back in 2001, research from Pepperdine University discovered that the 25 firms with the most female-friendly presence boasted profits 34% higher than the industry average. These results were repeated in 2004, 2005, 2006 and 2007.

Further research from McKinsey & Co in 2012 found that in a study of 180 publicly traded US and European businesses, those with more women on their executive boards enjoyed higher returns on equity and margins on earnings before taxes compared to their less-diverse competitors.

And yet there still remains a significant gender divide in workplaces across the globe. The Equality and Human Rights Commission launched an inquiry into sex discrimination within the finance sector five years ago, discovering that the pay gap between men and women for annual gross earning was around 60%. It was also discovered that in more than 50% of cases the gender pay gap for discretionary performance-related pay was 45% or more.

Figures like these may well be one of the reasons behind why women are so underrepresented in board-level roles within the industry.

A distinct lack of career progression for females in finance is also affecting their presence in the industry. PwC recently published a report on ‘Female millennials in financial services: strategies for a new era of talent’ and discovered that 20% of female millennials are put off working in financial services due to the image perpetuated by the industry, and 66% currently employed in the sector do not believe they will ever reach a senior level position.

Biases like these are damaging the sector’s ability to attract top female talent, but there are a number of steps firms can take to ensure a more diverse workplace in the near future. Some strategies include:

  • Making hiring managers more accountable for diversity.
  • Making the hiring process and corporate culture more female-friendly (this can be done by ensuring a women is always present on interview panels, for example).
  • Providing female-focused mentoring, networking and support services (this can be done through events, investing in Women’s Internal Networks (WINs) and also mentoring programmes. Staff from all levels should be encouraged to engage).
  • Providing gender-specific coaching for leadership skills and career progression.
  • Providing more flexible work schedules.

It is the US that is leading the charge when it comes to gender diversity in the finance sector. According to data from the Bureau of Labor Statistics, by 2020 there will be 6.2% more female workers in the US workforce compared to 2012, and women will also account for 41% of senior executive posts by 2030.

Europe and Asia lag behind the US, however gender diversity is now a higher priority on their hiring agenda. “There are now more women in the professional ranks coming through into senior levels” notes Antonia Cowdry, the Regional Head of HR for the APAC region at Deutsche Bank for example. 

Nevertheless, there is still a great deal of work to be done. For more information on hiring women in financial services roles, feel free to contact us here.

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This content has been brought to you by Selby Jennings, part of the Phaidon International group. Selby Jennings is a specialist provider of Banking recruitment solutions across Europe, the US and Asia. Selby Jennings is committed to the gender cause, and is currently hosting a number of gender specific panel events to help close the diversity gap. Our next event, “The War for talent & What Women Want” will focus on what employers need to do to attract female tech talent.

What do you believe are the best ways to close the Financial Services gender diversity gap? Please join the conversation and post your comments here.