Report: Women Continue to Lag in Finance Industry

By:
Chris Gaetano
Published Date:
Jun 14, 2016

WomanRunningLateA recent report from management consulting firm Oliver Wyman has found that, despite gains, women still lag behind me in the finance industry, according to the Wall Street Journal. The report looked at nearly 400 financial services firms in 32 different countries, as well as polled 850 financial services workers, including more than 100 senior female and male leaders. What it found is that women accounted for about 16 percent of executive committees. At the current rate of growth, however, the report estimates that it will take until at least 2048 before women make up even a third of executive committees. Progress is a little better on boards, but remain significantly outnumbered by men, making up only 20 percent of members. 

The study noted that women tend to experience a mid-career drop-off in the financial services industry, which leads to them being 20-30 percent more likely to quit than women in other industries. This means that the further up in the hierarchy one goes, the fewer women there are. Conversely, women are highly represented at the lowest ranks. The study notes that 71 percent of support staff are women, compared to 48 percent of professional positions, 40 percent of managerial positions, 28 percent of senior manager positions, and 21 percent of executive positions. 

The study points to several possible reasons for this slump, which include: 

* Insufficiently flexible working options and stigma for using them; 

* Insufficient support for family responsibilities, for both women and for men; 

* Shortcomings with regard to predictable, transparent and equitable promotion processes and equal pay; and 

* Persistent sources of low inclusion in culture affecting women such as invisible unconscious biases and traditional assumptions.

These issues are part of a larger overall problem, according to the report, that while businesses have done much to address superficial gender equity issues in the workplace, such as increasing networking opportunities and implementing mentorship and leadership programs for women, they have done little to address the deeper, less visible problems. 

"These efforts have been insufficient in retaining and advancing women over the long term, in large part because such efforts have done little to fix the invisible aspects of gender inequality: the underlying values and assumptions that define an organization’s culture and day-to-day work styles – as well as the many unconscious biases," said the report. 

More specifically, the company said that men and women are subject to different standards, that men get more "stretch opportunities," that high-performance is associated with masculine traits, that women are not let into informal professional networks necessary for career advancement, that too many women remain silent in the face of these problems, that firms are still guided by traditional gender roles and assumptions, and that there aren't enough female role models in top leadership. It also noted that it can be a challenge for firms to even acknowledge there's a problem at all. 

These obstacles are particularly jarring for younger women entering finance. The report noted that older women who joined the industry in the 80s and 90s "knew what they were getting into and expected to deal with the issues discussed above and more." By contrast, "millennial women come into the industry with completely different expectations." The contrast between expectations and reality, said the report, creates a culture shock that has long-term repercussions over the course of their careers. 

"This burden makes women eventually realize that the cost they have to pay for their success is higher than that of men, whereas the potential benefits and opportunities are less certain. Many women opt out when this realization is made: the cost of growing their career outweighs the potential benefits, especially when taking into account the greater uncertainty and obstacles they face. It becomes a risk-weighted cost-benefit decision," said the report.  

When women do reach executive-level positions, the study notes that they are most likely to be either the head of HR or marketing, with 45 percent of female executives in this role. Next highest is legal, audit or control, a position taken by 30 percent of female executives. Below that is risk and actuarial, at 15 percent (a jump of more than double from 2013's proportion at 7 percent). 

The report makes four recommendations to address the issues women face in the financial services industry. In short, it says that firms need to support women at the point they usually face the mid-career slump and are at most danger of leaving the industry, improve the talent management process overall, address unconscious biases and assumptions about women in the workplace, and bring men into the solution. 

Click here to see more of the latest news from the NYSSCPA.